The bill for the Credit Union CUPlex could be about to go through the roof.
North Battleford city council seems poised to approve a 75 per cent hike to the Recreation Cultural Capital Facilities levy in order to complete the last two components of the CUPlex, now estimated to cost around $55 million.
Mayor Ian Hamilton and three councillors indicated at Monday's council meeting they were prepared to support such a hike, which would see the levy increase for a single family unit from $100 to $175.
But they stopped just short of approving the measure Monday. Instead, the mayor has called a special meeting at City Hall on Feb. 7 at 7pm, at which time the CUPlex issue will be the only matter up for discussion.
Discussed evening will be the proposed RCCF hike, as well as a recommendation from administration to award the n contract for the curling and field house components to Red Deer based Scott Builders for a price of $17,709,949.
That resolution was on Monday night's agenda, but after a short it was tabled to the special meeting for a vote on that night. Mayor Hamilton indicated later that councillors wanted further public feedback before the tender was officially awarded.
The special meeting was called "so that we may speak to the community in the next couple of weeks or so," said Hamilton. Hamilton also said he wanted to ensure all councillors had an opportunity to have their voices heard on the issue, as it was known some councillors were going to be unable to attend the regularly scheduled council meeting set for Feb. 14.
The latest cost numbers for the CUPlex were submitted by Finance Director Byron Tumbach in a Jan. 20 memo.
Tumbach reported the total cost of all four components of the CUPlex totals $55,035,227. That is $5 million more than Barr Ryder Architects had estimated for all four components in late 2009.
The expenditures submitted by Tumbach for all four CUPlex components amount to the following: Barr/Ryder engineering $1,998,918; performing arts (APM Construction) $13,773,009; aquatic centre (Jen Col Construction) $17,262,800.
The curling rink estimate is for $7,362,000. The field house cost increase contingence is at $11,751,000. Site services at the CUPlex site amount to $2 million and the financing charges total $887,500.
Tumbach's numbers are based on a number of assumptions including an interest rate holding at five per cent. Tumbach noted in his memo that it is "difficult to determine what the actual rate will be charged."
The $55 million price tag for the project means the City faces a shortfall in financing all four components of the project to completion. According to Tumbach's, the current funding in place for the project - including, among others, current federal, provincial, and municipal funding as well as an expected $10 million from the fundraising campaign - amounts to $37 million.
"We're looking at a shortfall of $17,897,000," Tumbach said.
Tumbach explained this shortfall can be dealt with through debt financing. Two instruments are in play, he said: one is bridge financing, which is 11.3 million representing the amount borrowed by the City that is backfilled by donating partners. The remaining debt would be $12.7 million on a repayment term of 20 years. That would cover the shortfall, but Tumbach noted there would still be a deficit at the end of that period.
Tumbach outlined three scenarios for proceeding with the project.
The first was to complete all four components - theatre, aquatic centre, curling rink and field house - without increasing taxes to finance the work. According to Tumbach, that would require the City to borrow $24 million, with 50 per cent of borrowing tied to contributions that are to be realized over the next 10 years. The downside was that the city would face a deficit at the end of 22 years of just over $6 million.
The second called for the City to complete all four components, but this time with a 75 per cent increase to the RCCF levy to make sure there is no deficit at the end of the capital repayment time period.
"If the City were to increase the RCCF levy by 75 per cent or $637,000 all four components could be built with no internal debt being experienced once the capital payments were completed," Tumbach stated in his memo.
The current RCCF levy is set at $100 per household, and at 2.162 mills for commercial property. Under this scenario the RCCF levy would go up by $75 to $175 per single family unit, and the commercial rate would go up 1.6 mills on top of what is currently charged.
At the end of the 20-year cycle there would end up being a surplus of $7.8 million, Tumbach said.
A third scenario was to remove the field house from the CUPlex equation entirely, and build the other three components including the curling facility.
Tumbach said this would in turn reduce the cost of the project by $11 million and reduce the debt requirement from $24 million to $16 million. It would mean no increase at all to the RCCF levy. There was a side benefit in that the RCCF would begin to grow again in the middle of 2013, and by the end of the 20-year debt repayment cycle there would be a balance of $7.1 million in the RCCF levy, Tumbach stated.
As well, with the field house removed, the $10 million fund raising effort would be reduced to $8 million, removing $2 million that was to be pledged towards the field house. Already $1,234,764 in contributions has been committed towards the field house component, Tumbach stated in his report.
Monday night, councillors made it clear quickly they had no interest in removing the field house from the equation. Council said they wanted all four components built, and Ron Crush was quick to declare his endorsement of the RCCF hike.
"For me it's not just about the CUPlex, it's about North Battleford's future," said Crush. However, he also expressed disappointment at how long it took for the fund to get started in the first place.
"The sad part about it is it didn't get going soon enough," said Crush, and went on to say the enhancement of the RCCF fund was "in lieu of not having contributed for so many years."
Crush said the RCCF hike was something citizens could accept and said the facilities would "set us apart" from other communities in the Northwest. He also said the increase amounts to only 20 cents a day per family.
Councillor Don Buglas also voiced his endorsement of the proposed RCCF increase.
"I see this very much as an investment in our community and our citizens," he said. "It really supports the type of thinking, forward thinking, that we need in our community." He also echoed Crush's comments about having a forward-thinking approach as opposed to a "reactionary" approach.
"We want to be proactive, not reactive, and we're doing that with scenario number two," Buglas said.
Rhonda Seidel echoed her support for the RCCF hike. "Counillor Crush and Councillor Buglas nailed it for me," Seidel said.
Not all councillors were present at the meeting: notable by their absence were Trent Houk and Grace Lang, both of whom have voiced concerns about mounting costs of the project in recent months.
At this point, a 75 per cent RCCF levy increase seems likely to garner the four votes needed for passage. Still, councillors could yet change their minds in a similar manner to what was seen during the 2009 budget, when a proposed 4.75 per cent mill rate increase was first approved and then reversed when two councillors withdrew their support for it.
Mayor Ian Hamilton, who has long supported building all four components, expressed confidence that the public would support the RCCF levy increase.
"I believe that the public is behind the project very strongly," said Hamilton after the meeting. "In the majority, that's for sure."
He noted councillors' comments that no one wants to pay more out of pocket to the City, but "I strongly believe the majority of the public are very much behind this project. Almost entirely, the entire council ran in the last election based on the completion of this project, so I am very confident of it going forward."
In addition to the outstanding issue of a levy increase, the Feb. 7 meeting will also see the issue of a tender award for the curling rink and field house components come to a vote.
Scott Builders was one of five finalists short-listed and came in with the low submitted prices for both the field house and curling component. Their submitted price for the field house was $11,751,000 and for the curling rink was $7,362,000.
That total price came to $19,113,000, but a further $1.4 million in total savings was found to bring the tender down to $17.7 million. Savings came from elimination of some flooring finishes, paint, reducing kitchen equipment, a change in block materials, reduced site work and elimination of the proposed racquet courts.
