by Tristan Turner
Morinville could be coming close to its self-imposed debt limit of $25,133,097 if Council approves a $22,020,000 borrowing bylaw, which passed First Reading May 22. The bylaw presents a worst-case scenario of just over $22 million in borrowing for the roughly $30 million project.
Morinville currently has $2,302,300 in debt, the Morinville Community Cultural Centre having been paid in full last June as well as a $1.7 million loan for the 77 Acres the rec centre sits on. The current debt combined with the $22 million for the rec centre would push the Town right up to their self-imposed limit and begin to approach their $29,568,350 legal limit if the full amount approved was actually borrowed for the project.
The bylaw was presented to Council by Morinville’s Chief Financial Officer
Shawna Jason, who noted that while the borrowing allows up to $22 Million, she expects the real cost to the Town to be far lower.
Jason told Council the full amount of $22 million is a “worst-case” figure should the Town of Morinville receive zero dollars in grant or sponsorship funding for the project. Jason said the Town has spent $6,185,000 on the project thus far and that she has budgeted $6,185,000 in sponsorships and fundraising, which would mean the Town’s actual borrow for the project would be just under $16 million. This would put the Town in a far more comfortable position in relation to its debt limit by reducing the amount required to be debentured for the project.
The debt will be debentured over the long-term (up to 25 years legally, though likely much shorter in reality) and will be primarily be paid off through Municipal Sustainability Initiative (MSI) grant funding through the province, and Federal Gas Tax funding. This would mean there should be no impact on Morinville’s tax base to pay off the debenture for the new arena.
Council and administration have acknowledged that the operating costs for the new centre may have an impact, however. Operating costs for the facility have yet to be discussed at a public meeting; however, a business case developed by Sturgeon County and Morinville last Council term did identify some of those numbers. That document is on the Town of Morinville’s recreation centre page.
The Borrowing Bylaw is largely a formality as the previous Council already approved the construction of the arena in their capital budget, and last June added the field house portion when the builder identified it could be built for approximately half of the quote if built in phase one. Phase one originally included only an arena.
The new rec facility is already well into construction just outside of town along East Boundary Road and is expected be built in three stages, with this stage including one sheet of ice, a fieldhouse, a track, program room, fitness equipment, and some common areas.
Later phases would include an aquatic centre, second sheet of ice, outdoor arena, and a curling facility, as well as outdoor fields and tennis courts. No plans are in place as to when those phases would be developed.
First reading, put on the table by Councillor Hall, passed unanimously with no questions from Council.
Second and Third Reading is scheduled for June 26.