(File Photo/paNOW Staff)

By Susan McNeil

Arena and aquatics centre

City discusses $30m loan for higher cost arenas and pool

Jun 9, 2022 | 8:37 AM

With some debate and firm opposition from two councillors, council will vote on Monday whether to borrow an extra $30 million to pay for the increased cost of starting the arena and aquatic centre project this summer.

Mayor Greg Dionne said it still makes sense to go ahead with the project after staff came up with a solution to pay for it without raising taxes.

“I’m still positive. We’ve had very good positive conversations with the province. Everyone has overruns,” he explained.

Dionne said that discussions with other municipalities at the recent FCM meetings in Regina showed that all governments are facing cost increases of 30 to 50 percent because of inflation.

The city had a budget of $60 million for the two NHL sized arenas and the aquatics centre and thought at first that inflation caused by the pandemic and war in Ukraine would bump it up to $70 million.

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The added $30 loan was intensely debated on Wednesday evening but the motion to add it to Monday’s agenda passed.

Staff found about $7 million in cost savings which means the proposed construction cost of $105 million plus taxes will go forward as a motion.

The Wednesday meeting was of the executive committee and some decisions must be made during the regular meetings.

The increased cost caused Councillor Dennis Ogrodnick to say he would change his support for the project and vote against it, a decision he said he wrestled with as he wanted it to go ahead.

He said he promised his voters that the budget would not increase.

“The only thing I have is my word,” he said. “I can’t vote in favour of this funding.”

Ogrodnick left before the vote was called, however, as he had health issues caused by a fire that was lit next to city hall during the meeting.

Councillor Charlene Miller was not in attendance.

In order to pay for the expanded costs without raising taxes, staff said it can be done by using the tax revenue from the additional private development expected in what has been called “The Yard District”.

Eight lots have already been sold, ranging in size from three to five acres. Another 50 acres of land will be subdivided by the owner as the lots approach being sold.

One hotel can bring in about $150,000 annually in taxes, council heard, but without permits on actual buildings, staff could not say what the potential revenue would be.

Money will also come from the facilities fees charged and together, the revenue will be enough to cover the approximately $2,2 million in annual debt payments for the next 30 years, council heard.

Another tactic will be to ask the federal government to increase the amount of money it gives the project in grants.

Dionne said he has high hopes this will be successful.

“What makes me feel that we’re going to get extra funding is that it was acknowledged by the province that it was up and they would support us going to Ottawa,” he said.

The vote to borrow money passed with Councillors Lennox-Zepp and Tony Head in opposition.

Head said he had no qualms in casting an opposing vote.

“This cost is too great for our residents,” he said, and that the risk is just too high.

Council will vote on Monday whether to award the construction tender to Graham Construction of Saskatoon.

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susanmcneil@pattisonmedia.com

Twitter: @princealbertnow