Fund for growth projects an idea that's evolving
One councillor argues council has no public mandate to spend $40 million
By: Peter Boer
| Posted: Wednesday, Jan 16, 2013 06:00 am
Community groups are so excited about a potential new fund for capital projects that they could spend its possible $40 million balance in one year instead of the projected five, says city manager Patrick Draper.
On Monday night Draper updated council on the proposed capital partnership fund, an idea Draper first raised last year. He originally called it the capital growth fund. If approved, the fund would provide $40 million over five years for new growth city infrastructure.
On Dec. 11, members of the city's staff and council discussed the fund at a meeting with representatives from 21 community organizations, from both the public and private sector.
“There were comments that we allocate the entire $40 million in the first year instead of over five years because many (groups) say they will spend this money far faster than we are thinking,” Draper told councillors of the feedback received.
Draper originally pitched the idea of a capital growth fund after noting that simple infrastructure maintenance is consuming more and more of the city's capital budget, leaving little room for growth.
To set up the fund, the city would borrow from its internal cash flow, as well as from its annual municipal sustainability initiative grant funding from the provincial government, at a rate of $8 million annually. The city would repay the money annually, which would boost property taxes by 0.30 per cent a year for five years. The fund would cover one-third the total cost, with applicants responsible for the remaining two-thirds. Draper estimates that could mean as much as $120 million in total investment in capital growth projects.
Draper also gave council a preliminary look at what kinds of projects would be eligible under the proposed fund. Community-sponsored projects like community halls, recreation facilities, major attractions and cultural facilities would be considered, while studies, renovations of existing space and land purchases would not be eligible. A separate board would adjudicate individual projects.
Mayor Nolan Crouse said he is concerned about the community's capacity and ability to build as much as $40 million of new infrastructure in five years.
“I'm struggling to find how the community has the capacity for another curling rink, let alone 10 of them,” Crouse said, referring to the $2.4 million renovations to the club in 2010, which was funded in part by all three levels of government.
“It's OK to do the cheerleading, but who is going to step up and lead those projects?” he asked.
Draper said groups will likely hire outside firms for project support once an application is approved.
“The community groups will require some level of infrastructure for themselves to be able to build business cases and access other levels of funding,” Draper said.
Only Coun. Cam MacKay spoke and voted in opposition to the program, saying he didn't have a mandate from the public to spend $40 million and that council should leave a vote on the partnership to the council elected after October's municipal vote.
“In my understanding of the nature of government, I've never been convinced it's a smart idea to put together a big pool of money first and then look for projects,” MacKay said.
“At this point in time, I'd be very uncomfortable rolling out a $40 million spending package.”
Administration will return March 11 with a proposed policy for the fund.