Most of the new facilities are open. Now it’s time for Woolwich to get the last of the financing lined up for its recent building boom.
To that end, township council agreed this week to borrow $3.72 million to cover the outstanding balance on some $35 million in capital projects.
The money will be debentured through the Region of Waterloo, as provincial legislation restricts lower-tier municipalities from taking on long-term debt directly. The loan is likely to come from an Infrastructure Ontario program offering a 25-year term at about five per cent interest, said township treasurer Richard Petherick.
Woolwich has been debt-free since the beginning of the decade.
In a report presented to councillors Tuesday, he indicated $2.6 million of the total is related to the recently opened Woolwich Memorial Centre in Elmira. The new administration building requires $876,000, while remaining costs for the Floradale fire hall amount to $247,000.
The total of $3.72 million to be debentured is up slightly from the $3.28 million forecast in 2007.
Given that the borrowing comes to about 10 per cent of the total spent – other projects include new community centres in Maryhill and Breslau, an addition to the arena in St. Jacobs and improvements to the Elmira Public Library – the township’s finances are in good shape, Petherick noted.
The relatively low debenture is even more noteworthy in light of the large increases between the original budget numbers for every project and the actual costs. What would become the WMC, for instance, started out at $12 million, but that total grew with the scale of the project, eventually finishing at just shy of $23 million.
To keep borrowing to a minimum, the township drew on interest payments from its ownership stake in Waterloo North Hydro, eventually monetizing much of the debt it held in the utility. It also channeled money from a growing tax base to the projects. Residents paid a special 1.5-per-cent levy on property taxes to help fund new recreation facilities, a fee that was bumped to two per cent through 2010. Community fundraising efforts brought in $5.5 million for the recreation facilities.
There is, however, one remaining issue: the township is depending on $1.6 million from the sale of surplus properties as part of the financing package. The larger assets include the old township halls and the former Elmira pool property, but most contentious is a plan to sell part of Victoria Glen Park as a site for residential development in Elmira’s north end. In the wake of strong public opposition, the township is now looking at alternatives for replacing funds expected from that development. A report is due later this month.
The uncertainty about that issue prompted Coun. Sandy Shantz to question how a potential shortfall will be addressed, suggesting the debenture might have to be higher.
For his part, Coun. Murray Martin expressed some reservations about the 25-year amortization – “that’s a long time to be paying interest.”
To that, Petherick said the loan agreement would allow the township to accelerate its payments as finances allowed.
At five per cent over 25 years, Woolwich will pay $270,000 a year for the term of the debenture, bringing total payments to $6.75 million and putting the cost of borrowing at about $3 million.
The only remaining building project, the Breslau community centre, is expected to have no impact on borrowing or other financing arrangements. Just under construction, the $2.2-million facility received a joint federal-provincial grant that covers two-thirds of the cost. The township’s share will be covered through development charges collected on new construction and from money raised by the community.
