Council passes debenture bylaw for civic centre upgrade

By Stephen Dafoe

Morinville – Town Council gave unanimous second and third reading Tuesday night to a borrowing bylaw that permits the town to borrow up to $2,875,000 to upgrade St. Germain Plaza, home of the Morinville Town Offices and the Morinville Public Library.

Renovation of the Civic Plaza building was approved last December in the 2011 budget; however, the original estimate of $2.5 million was increased to $3.5 million when a more concrete assessment of the project was completed this spring. Of that figure, $675,000 in project funding will come through the Alberta Municipal Infrastructure Program, leaving a potential $2,875,000 to be borrowed and repaid over the next decade and a half.

In discussing the matter Tuesday night, Councillor Gordon Boddez expressed deep concern about how the spending will affect the community down the road.

“I know council has delayed this [project] a couple times,” Boddez said, adding he was concerned about Morinville’s accumulated spending this year. The councillor cited the $700,000 added to the 2011 budget for a number of additional staff positions, the $250,000 per annum debenture payment on the Community Cultural Centre and a more than $200,000 adjustment to the budget to account for a spreadsheet error which overlooked wages for the planning and development department. The councillor also referenced the reduction in mil rate for businesses recently approved by council. “In total this is $1.5 million in additional expenditures to our organization. I guess for me I’d really like to start seeing the implications on our future budgets.”

Boddez told his fellow councillors he was having trouble integrating the spending into the community’s future and what those costs might look like in subsequent years.

“When we look at the revenue side, some of those are soft,” he said, adding he felt the town was basing some of its financial projections on potential future growth and fines. “I guess I’m looking at the risk management here.”

Morinville’s Chief Financial Officer Andy Isbister said funding for the Civic Centre was included in 2011 budget with the debenture payments projected into budgets for 2012 and 2013. The CFO said funds currently allocated for some major capital projects will not be present in subsequent years and reduced spending on capital projects in those years would cover the debenture payments on the Civic Centre renovations.

“We felt comfortable we could meet those [payments] without having exorbitant increases in taxes,” Isbister said, adding the town wants to keep taxes as low as possible for residents.

The CFO said the difference between the Civic Centre debenture and a conventional home mortgage is the interest rate is locked in for 15 years. With interest rates currently low, Isbister said now was the time to move forward on the project, particularly when stalling the project another year could lead to labour cost increases of some 20 per cent once major projects in the region get underway over the next year or two.

Mayor Lloyd Bertschi expressed his own concerns – concerns about revisiting the validity of the project after having made a commitment to go ahead with renovating the 40-year-old building.

“We’ve already approved the project going ahead,” Bertschi said. “We’ve already approved the funding.”

The mayor expressed his concern that revisiting whether or not the project should be done would send an unfair message to administration in both the short and long term as it would leave them uncertain as to whether or not council might reverse other decisions and commitments in the future.

Councillor Boddez reluctantly supporting second and third reading of the borrowing bylaw but was nonetheless remained adamant the spending may have an effect down the road.

“We’ll find out in the next couple of years in the budgeting process,” Boddez said. “It will come out in the wash.”
First reading of the borrowing bylaw was given at the Apr. 26 meeting of council. An advertisement was run by the town advising residents of the borrowing bylaw, but administration received no response from the public as of the May 24 deadline.

The $3.5 million renovation will upgrade both the Town Offices and Morinville Public Library. The figures include costs associated with relocating staff and services during the renovation project.

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  1. The increase in spending approved in the last year in Morinville is quite frightening.

    This debt taken out to renovate the town office is equivalent to over $950 per household. Yes, residents of Morinville, while it may not be in your name, this money is backstopped by $950 (plus interest) of your future earnings, it’s real money.

    This is in ADDITION to the large tax increase that you will receive next year as a result of the city adding around one million dollars worth of re-occurring salaried positions.

    Perhaps we can afford to spend $950 per household on renovations, maybe we need to spend $280 per household on new salaried workers for the town, maybe we even can afford to spend $3,300 per household on a community center that is projected to only cover 30% of it’s re-occurring operating costs in the best case scenario.

    But maybe we don’t need to because we can’t afford it? Council needs to be asking “can we afford this” instead of “do we want this”. This is a simple question that needs to be asked once in a while by EVERY member of council, not just the one or two that we see occasionally objecting.

  2. Well, I paid most of my portion this year as my residential taxes increased over 25% from last year. That includes an additional $174 in school levy for a non-public school system in which I have no say whatsoever. This keeps up, St Albert won’t look so bad…

    I am ever wary of people “assuming” that future year funds will be there when needed. Salaried positions are difficult and costly to get rid of, so each one must be scrutinized quite closely before being added. At times, I can’t help but wonder if the long-term scrutiny is taking place. It is all too easy to spend money that is not your own.

    My two cents.

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