Town approves $1 million loan for upgrades

Jasper will borrow a million dollars to pay for renovations to the Activity Centre, bringing the cost of the first phase to $5.5 million.

Town council passed second and third readings of the borrowing bylaw on Oct. 20 to allow the town to begin work on the renovations two weeks earlier than expected.

The renovations will now be paid for through $1.5 million from capital reserves, $3 million from the Canadian Building fund and a $1 million loan, which is expected to be covered through provincial funding.

Repayments on the loan will begin in 2011, at a rate of $217,000 a year. Most of the money will come from Municipal Sustainability Initiative (MSI) funding from the province, according to Town Manager George Krefting.

“Our projected MSI funding is $2.3 million per year for 10 years,” Krefting said. “That can change based on the economic situation, but the municipality is counting on receiving 75 per cent of its allotted MSI funding.”

Since the loan will rely on provincial funding, there will be no change to the municipal tax rate, Krefting said.

Yet in order to cover costs, the municipality is counting on a 25 per cent increase in visitation to the Activity Centre, something that is troubling Coun. Ralph Melnyk. He said he’s not convinced the municipality should rely on an expected revenue jump, especially after the Rec. Centre saw a large decrease in visitation last month – a drop of 50 per cent from the previous year. If membership sales continue to decrease, the town will need to rely on an even larger jump in fees or memberships.

“I don’t believe we can fund capital projects on estimated revenue,” Coun. Melnyk said.

Manager of Culture and Recreation Yvonne McNabb said the Rec centre will see a 10 per cent fee increase and a projected 25 per cent increase in membership sales once the facility has been upgraded.

Coun. Rico Damota echoed Coun. Melnyk’s sentiments.

“In a recession, I’m nervous about projecting an increase. I don’t know what the future holds and this puts me on the nervous side,” Coun. Damota said.
Project lead for the renovations Christopher Read said the municipality will be combining revenue from the Aquatic Centre and the Activity Centre, and will only need a 15 per cent increase in usage. Read said the municipality has compared fees with other jurisdictions, and has put forward very conservative estimates.

Coun. Melnyk said he was still nervous about the costs, and wanted more certainty.

“Revenues are all over. We can’t guarantee the numbers will be there to service the debt,” Coun. Melnyk said.

McNabb said feedback from the community points toward increase usage of the facility.

Mayor Richard Ireland said the decision to borrow the money was getting confused with revenue. The loan will be used to pay for upgrades to the roof, the activity centre lobby, insulation and air handling and a skylight. None of those items will attract more visitors, Mayor Ireland said. He asked administration to confirm if they were confident MSI funding would be available for five years. Krefting said he met with the province last week, who confirmed the funding was still coming through.

Finance manager Alice Lettner said the ultimate idea for borrowing the money and performing the renovations now was to save costs down the line.

“It’s more cost effective to do the roof at this time,” Lettner said. “We save architect fees by doing it at this time.”

She also said in the municipal budget, the town is only expecting to receive 65 per cent of its allotted MSI funding, so there is wiggle room.

McNabb said there will be other cost saving through the insulation work, which will help bring down heating costs.

“If it’s not done, it will cost more in the long run,” McNabb said.