New pool may require $11M loan
Should early cost estimates hold, staff suggest plebiscite may not be needed to approve expenditure
Shane Magee
Northern News Services
Wednesday, January 11, 2017
SOMBA K'E/YELLOWKNIFE
The municipality may need to borrow $11 million to finance a new aquatic centre if council opts to build one, an amount that may not require a plebiscite, according to city staff.
The amount is based on an estimated cost of $30 million for the new pool said Christine Sui, the city's manager of taxation, budgeting and evaluation.
"It could change," Sui said in an interview last month about the estimates. "It also depends on what the council agrees to do for the 2018 budget. There's lots of considerations (that are) factors to determine how much we have to borrow."
A report by Dillon Consulting from 2011 estimated the cost of replacing the Ruth Inch Memorial Pool, which reaches the end of its lifespan in 2020, at $55.9 million. Other recent pool projects in Northern Canada have been estimated to cost about $30 million.
A staff report to council in November stated low borrowing rates make it "beneficial" for the city to borrow for its portion of the project, and that debt servicing could be paid via Gas Tax Rebate funds the city receives.
A plebiscite would likely not be required if the amount to be borrowed remains around $11 million, Sui said. However, council could still opt to hold one to gauge public support.
Normally long-term debt requires a plebiscite, which is a public yes-or-no vote to a specific question. However, it's not required if the amount doesn't exceed the municipality's borrowing limit, which fluctuates. The city's debt limit is set by regulations in the Cities, Towns and Villages Act. It is calculated by doubling the city's revenue for the year the money is to be borrowed, and subtracting the principle amount of short-term debt the city owes at that time. There are a number of other factors set out in the regulations that can also affect the necessity of plebiscite.
The city already has a federal commitment of $12.9 million for the project, which requires a minimum city contribution of $4.3 million and construction to be complete by 2022. The city also has funds set aside in a capital fund that it can draw upon. This fund is expected to have $6 million this year, though that money is also used for other capital projects.
"This aquatic centre is at the very initial stage right now," Sui said. "We don't know exactly how much it may cost, whether it's feasible to have a new aquatic centre, whether we keep the old pool going. There is still lots of uncertainty now. We'll know more in 2018 when we do the study and have public consultation."
Location, for example, could impact the price if the city needs to acquire property or do significant work to prepare the land by blasting bedrock.
Mayor Mark Heyck expects public consultation to begin late this year to examine questions about location, design and cost. A staff report suggested the city may create a new committee to examine the issue, like it did when considering a 2023 Canada Winter Games bid.
"I imagine in the next year to year-and-a-half that council will likely need to have a conversation about how much of our own resources to put in," Heyck said in an interview Dec. 12. "Is there borrowing required - which likely there would be - how much that would be, how they would finance that over the long-term?"
Depending on how long public consultation takes, council may make a decision before the fall 2018 municipal election.
Issues regarding the pool arose during city budget deliberations during discussions of many projects, including a biomass boiler heating system for city facilities near the Multiplex, whether to spend money to move a climbing wall to the Fieldhouse and whether to pay $230,000 next year to re-side the Ruth Inch Memorial Pool.
"Spending this money on siding for a building that may not be there in five years is not wise," Coun. Adrian Bell said Dec. 7.
Council cut the spending, which was to address cracks in the siding which could eventually lead to mould growth in the walls. While discussing plans for bike lanes along the southern-most stretch of Franklin Avenue between Forrest Drive and Old Airport Road on Dec. 5, Bell suggested that area of the city is the most likely spot for a new aquatic centre.
Meanwhile, Coun. Niels Konge has floated the idea of building it between the Multiplex and Fieldhouse.
In an interview, the mayor suggested a new building would be better than a renovation.
"I think typically with these kind of projects it's, counter-intuitively, more affordable to build new than to renovate something that was built 25 to 30 years ago," Heyck said. "My expectation is that we're looking at a new facility, not a renovation of the old."
For several years, the Town of Hay River had contemplated a phased renovation of its recreation centre. The idea, up until last summer, was to continue to use parts of the building, which included a community hall, curling rink and hockey arena, while work was underway.
A plebiscite approved borrowing $15 million and the town was also granted federal funding based on the renovation plan.
Then the town suddenly changed course. Instead of a renovation, the recreation centre was torn down to make way for a new structure, leaving the town scrambling to find ways to host sporting events elsewhere and relocating community functions.
