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.