Province says “no” to $31.6 million grant for Library Square

August 21, 2020 · 0 Comments

Potential grant money of more than $30 million was a cornerstone of the Town’s financial plan for the $50+ million redevelopment of Library Square, but that money won’t be forthcoming, according to a word from the Province last week.

Their decision comes ahead of a Special Council meeting slated for August 25, at which Council is poised to approve the construction tender for Library Square itself, along with a new addition to the historic Church Street School and a new bridge to connect it to the Aurora Public Library.

Without funding from upper levels of government through the Investing in Canada Infrastructure Program (ICIP), Council will be facing two financial paths forward should Library Square clear the final hurdle.

In the first model, which was previously approved by Council in the event a grant did not come through, Library Square would be financed largely through reserve funds, including a $22.8 million draw from Hydro Reserves, which will leave an estimated $8.1 million left in that pot, a 20 year debenture, Development Charges, and Federal Gas Tax revenue.

Municipal staff, however, are now proposing an alternate model, which would, if approved, see the Town secure a construction line up credit up to a maximum of $38 million to fund the build during construction (See Page 8).

As it stands, the project budget is pegged at $51,939,500, excluding $7.5 million already spent on the purchase of two Yonge Street buildings immediately north of the Library.

“The grants were awarded primarily to communities based on need,” said Mayor Tom Mrakas on Tuesday. “Since Aurora is in a strong financial position, with healthy reserves exceeding $100 million, this put us at a disadvantage and we were not awarded the grant. Large capital projects, whether roads, sewers, recreation centres, parks or Library Square, are all planned on a long-term horizon to provide enhanced quality of life to the community, based on prudent management of our long-term reserve funds. The funding strategy for Library Square that Council approved in December 2019 was not dependent on unanticipated external funding or any increase in our planned tax rate.

“We were pleased that the tender came in within the approved budget guidelines and are excited to be taking yet another step forward in revitalizing our downtown core with this long-overdue project.”

This excitement, however, is not shared universally across the community, with many residents speaking out on proceeding with the project amid financial uncertainty stemming from the COVID-19 pandemic, nor is it shared universally at the Council table.

Speaking in favour of the project, Councillor Harold Kim told The Auroran that the grant money would have been a “bonus” for the Library Square project.

“I know some people will say, ‘That’s another reason why we shouldn’t go ahead with it,’ but, from my perspective, the reason why we did not get the grant was because we were one of the municipalities that were in financially good shape,” said Councillor Kim.

“They (the Province) had $6 billion in project requests and they only had $1 billion to give out, so they gave out the money to those municipalities who had financial challenges.”

Councillor Kim said he is unsure whether the grant decision will change the tone of debate either at the table or within the wider community, but said it will not influence his decision to move forward.

“I already know we have the funds to pay for the development and the addition of the recently-purchased building north of Library Square,” he said. “The funds are there and we have already approved the use of the Hydro funds. I think most of Council was ready to go even if this wasn’t approved. It doesn’t change the conversation for our part. We had our finance team tell us and disclose to us where the funds are coming from. We saw our DC (Development Charge) reserve schedule, we know the funds that we have. We have the funds, so it doesn’t change the conversation at all in my mind.”

From the perspective of Councillor John Gallo, however, it significantly changes the discussion.

A long-time critic of some of the components of the Library Square development, Councillor Gallo said his support all the way along has been based on receiving the Federal and Provincial grant money.

Without these funds, it is time to press “pause.”

“Seeing as how we didn’t get the $31 million is going to rely heavily on our Hydro Reserve funds and, to me, there are significant issues that really haven’t been planned out to the degree that they should,” said Councillor Gallo. “At least as a sitting Councillor, I am unsure how the impact of spending all of that money is on our reserves, on our financial position, rely on the income from that, which goes towards some reserves – we have to make all of that up. There are a lot of question marks there.

“I supported it to the extent that I could, I think that was pretty clear, that unless we get that money, I can’t support it. To be honest, even if we did get it, I would have had a tough time supporting it based on everything that is going on. It is not a ‘no,’ it is just push pause and let’s rethink this and see what happens in six months.”

Councillor Gallo contends that there hasn’t been a full “needs analysis” for the project and there are “things about it that don’t sit well with me.”

“I am a huge proponent of the arts and am a director of the Cultural Centre. I know the value [to] the community for that, but it has to be done properly and it is a huge responsibility that we have not only the capital expenditure but the ongoing operations of it. The Cultural Centre does a fantastic job and I have no doubt they would continue to, but there is a bit of a gap for me still – do we really need it?”

For Councillor Kim, the answer to that question is “yes.”

“I think it is short-sighted when there is a challenge – whether it be COVID-19 or some other challenge – the knee-jerk and the safe thing to do would be nothing, but we all know that vision and hope requires courage and it takes some risk, but in this case I don’t see there is any risk,” said Councillor Kim. “We can’t be short-sighted and leaders have to be long-term thinking, not short-term thinking because if you do short-term thinking you get hodge-podge stuff that other municipalities are dealing with.”

By Brock Weir