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By Brock Weir The redevelopment of
Library Square, including a three-storey addition to the Church Street School,
could top an estimated $37.9 million budget – but a Federal grant could offset costs
by more than $14 million – along with a one-time tax hike of 1 per cent in
2020. This, according to a
financial strategy set to be presented at a Special Council meeting this
Thursday, March 21, dedicated to Library Square. This week, municipal
staff will recommend to Council the approval of the addition at a cost of $27.2
million, the creation of an outdoor space, including water features and a
trail-shaped ice rink, at a cost of $8.36 million, and a new strategy to
address parking concerns at a cost of $87,882. Throughout Council's
extended debate over each of these big-ticket items, costs for both
construction and operations, have been in sharp focus and Thursday will provide
some clarity with the presentation of a financial strategy to make it all happen. According to a report
from Jason Gaertner, Acting Treasurer for the Town of Aurora, estimates to
bring Library Square to fruition vary between $35.6 to $37.9, but when grants,
using money in reserves, and debt financing are combined, only $3.5 million of
Aurora's Hydro Reserves, will be needed on the final invoice. “As the total
proposed required investment for the Library Square project is significant, a
sound funding strategy is essential,” said Mr. Gaertner in his report. The first option on
the table is a $1.6 million infusion from Development Charges (DCs), money paid
by incoming developers to account for future municipal growth. The bulk of the
money in this option, if approved by Council, will come from DCs set aside for
library use. DC reserves dedicated for Parks Development are current in a
negative balance. The second component
is Community Benefit Fees, which are also collected from developers. This
reserve stands at $2.6 million and staff recommend using this full pot for
Library Square. The third is the
proceeds from the sale of municipal lands. Much of this money -- $7.1 million –
comes from the sale of business lands on Leslie Street, the report notes, and
this full amount will be applied to the Library Square project. Debt financing is
another option on the table. Here, Mr. Gaertner's report recommends taking on a
20-year debenture of $6.7 million at a rate of 3.26 per cent. “This external debt
would subsequently be repaid in a controlled fashion through…the DC funding
sources and a dedicated one-time tax levy increase of 1 per cent, which would
be applied wholly to the 2020 levy, or phased in over two fiscal years,” says
Mr. Gaertner. “Once this noted debt has been paid off, the equivalent dedicated
tax levy increase can be removed.” Should these be
approved, the Town will then take $3.5 million from the Town's Hydro Reserves,
an account currently standing at $31 million, to go the rest of the way. “Because of its
significant balance and the Town's ability to invest these funds over a longer
term, these funds have become an important contributor to the Town's annual
investment income, which is utilized to subsidize the Town's operating budget,
as well as to further top up all reserve balances,” says Mr. Gaertner.
“Consequently, any draw on this reserve is likely to have a material impact on
the Town's annual investment income; as well as deteriorate the Town's general
reserves health. Keeping this in mind, staff recommend that the utilization of
this reserve as a funding source be minimized as much as possible.” Revenues from the
Hydro Funds are also being used for the redevelopment of the historic Aurora
Armoury. Finally, the $14
million balance is expected to come from grants. “In support of this
much-needed new cultural community asset, staff have now submitted the Town's
grant application to the Federal Government's Canada Cultural Spaces Fund for
consideration,” says Mr. Gaertner. “In this regard, as soon as the addition to
the Church Street School project has received final Council approval, a
fundraising consultant will be hired to conduct a feasibility study and to
provide guidance in setting up a community fundraising plan that will work for
the Town of Aurora. “In addition, staff
are investigating another grant opportunity (Building Communities Through arts
& Heritage – Legacy Fund) that could potentially be utilized as a funding
source in support of the construction of the outdoor space. Staff have already,
or intend to, approach Provincial and Federal representatives in an effort to
explore further potential funding sources for all components of the Library
Square project. Depending upon the outcome of fundraising efforts, the Town
will adjust its funding plan accordingly in order to ensure sufficient funding
is available. “Should a lower than anticipated grant value be
ultimately awarded, any related funding shortfalls could be drawn from the
Hydro Investment Reserve, or adjustments to the debt portion of the recommended
funding strategy could be made.”
Excerpt: The redevelopment of Library Square, including a three-storey addition to the Church Street School, could top an estimated $37.9 million budget – but a Federal grant could offset costs by...
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