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Port Elgin, Saugeen Shores has two new buildings and now has to
pay for them.
The new Port Elgin library began as a simple renovation that turned
into an entire new building. Unfortunately, fundraising did not turn
out as expected with a shortfall of more than $350,000 according to
a report brought forward at Town Council Monday night.
"I have a lot of questions and it's disappointing how the figures
grew," said Councillor Diane Huber. "I feel as a Councillor, I did
not receive enough information. In October, 2007, this whole library
thing got started and Port Elgin staff and County staff worked
closely with the architect, but Council did not. We missed an
opportunity to question the growing expenses and we simply weren't
at the table."
Huber went on to question the architect's fee. "We chose this
architect without going to tender and I guess I understand why, but
his expenses turned out to be one-third higher. There is $26,000
that I wasn't aware of unless I missed something at a previous
meeting. I would suggest with projects like this that, in the
future, council is kept more informed. Also, there is an expense for
$112,00 in the 2009 Capital Budget. What is that and has it also
gone up dramatically?"
Lori Sweiger, Town Treasurer, answered Huber's questions. She
explained that the total library operating budget is combined for
Port Elgin and Southampton and that council would have more
involvement on future projects. Sweiger also pointed out that the
initial architectural fee of $100,000 was a base cost and that the
$26,000 'extra' was for disbursements, travel costs and other
expenses. The $112,000 was the expected cost to finish the work
outside and it was expected. It's part of what we are dealing with."
Huber then went on to ask about the new Dr. Earl Health Centre
medical building. "In July, 2008, a report said that the projected
annual revenues are expected to be $60,000 to cover operating costs.
Will that happen or will there be an additional cost there?"
Sweiger said that $60,000 was the projected revenues figure. "I
don’t know that we ever expected the rents to fully cover the debt
costs." she said. "We haven't had a full year yet so we
don't know the final numbers. “There was always an expectation that
the taxpayer would have to pay part of the debt cost."
"Well, I wanted to have some confidence that the $60,000 would be
there to cover the operating costs," added Huber. "The total has
gone from $1.4 million to 1.7 million and, as a councillor, I have
difficulty explaining it to the public when I have trouble getting
answers."
The report's recommendation was to ask the Town to adopt a by-law
that would authorize the borrowing of money from CIBC to fund the
balance of the unfunded construction costs of the Port Elgin Library
Renovation and Addition Project estimated to not exceed $400,000 and
the Dr. Earl Health Centre estimate to not exceed $1.5 million.
Councillor Luke Charbonneau asked why a bank loan instead of using
funds in the future capital projects reserve. Sweiger replied that
the cost would use most of the monies in the reserve which is
typically used for smaller infrastructure projects. When asked by
Charbonneau how much was in the reserve, Sweiger said that she would
have to confirm the figure but thought it was approximately $1.9
million.
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"This is a considerable expense (loan) when we have the
money in reserve. I would like to see some sort of
projection on what kind of demand there will be on the
future capital reserve and to see if there would be too much
pressure," added Charbonneau. "I would like to see the
interest costs. If we look back however, the difficulty with
controlling the budget is the way the fundings are announced
and how we applied for it. Everything took place very
quickly. The only thing I can think of for the future is to
do a better job of planning and do consultations before we
apply for grants instead of after. I will say though that we
have ended up with two great buildings that we can be proud
of."
Councillor Thead Seaman asked why a portion of the reserve
couldn't be used and the balance in the form of a loan.
Councillor Fred Shildroth said that looking back over the
library costs, they actually came in close to the budget
amount. "It was the fundraising that was disappointing.
Given the economy, I think we know that there was little
hope for fundraising that amount and it should come as no
surprise that we have to finance the difference. Had we not
spent that money, we would not have attracted new doctors
and I think the community favours putting some of that cost
on the tax bill. I look forward to the 2010 budget and
perhaps being able to pay the amount off sooner."
"I think there was a very unreal expectation that the
funding amount could be raised," said Councillor Victoria
Serda. "I think all in all, as a council, we should be
willing to put our fair share into the pot for these
projects. I started out on the Library Renovation Committee
and we shifted the expectation of what the building would be
halfway through to make it completely accessible. The
original $975,000 went up because the entire plan changed in
the middle."
Serda went on to say that she feels Council should have
better overall plans or strategies for projects. "We have no
overview of our community needs. When there is a lack of
planning, there are over-rus on costs. We should know our
priorities ahead of time."
Vice-Deputy Mayor Doug Gowanlock said that, "This community
depends on us to oversee the costs and at the end of the day
when we build, we have to do the best we can. Councillor
Serda talks about fair share. Fair share is actually the
taxpayer. When we build at a cost over-run, it makes it more
difficult to go ahead with another project. I could support
using part of our capital reserves as suggested by
Councillor Seaman, but not all of it. As we look at capital
projects, we have to really examine or ability to raise
funds. As Councillor Serda said, 'we cannot continue to
build projects this way'."
"Unfortunately, our funding is governed by the Province,"
said Deputy Mayor Doug Frieburger, who chaired the meeting.
"The grant came along and it will be our children who will
benefit. We went forward with the medical building and it's
unfortunate we did get over-runs. I believe as a council we
have done the best we could."
The recommendation was carried.
For additional news on this subject see:
Town
Council Lori Sweiger adds some clarification
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