Reasons to vote NO to borrowing $8.5 million in the upcoming referendum

The District of Coldstream is asking it’s citizens on October 15, 2022:

“Are you in favour of “District of Coldstream Public Works Building Loan Authorization Bylaw No. 1808, 2022” which would authorize the District of Coldstream to borrow up to $8,500,000, with interest, over a period of 30 years in order to finance the construction of a Public Works Building to be located at 8010 Aberdeen Road, Coldstream?

Proposed Public Works Building

5Cs say NO

1 – Rushed Decision-Making

The preliminary design and information for the Public Works Yard Facilities Replacement/Renovation project was presented to Council at the June 6, 2022 Committee of the Whole Council says that this 2022 priority project was initiated after the Coldstream/Lavington Heritage Society expressed a desire to use the existing house to the east of the Municipal Office for a museum/ display/

On June 13, only one week later, council passed the following:

THAT “District of Coldstream Public Works Building Loan Authorization Bylaw No. 1808, 2022” be read a first, second and third time, by title only, this 13th day of June 2022;

AND THAT “District of Coldstream Public Works Building Loan and Authorization Bylaw No. 1808, 2022” be forwarded to the Inspector of Municipalities for approval.

And…On July 25 th Council was presented with the Borrowing Bylaw question

“THAT Council approve the following question to be put to the electors for their consideration during the 2022 General Local Elections:”

Councillors Cochrane, Dirk, Enns, Hoyte and Taylor we in attendance Hoffman was absent.

That motion received approval by 3 of the Councillors and our Mayor, so approval was four in favour and two against, one absent. Given the nature of the ongoing financial commitment for Coldstream taxpayers this was not a resounding vote of confidence.

Thus, it appears that this project was rushed through with little debate or discussion or thoughts of alternate solutions. Two aspects in particular appear to have been omitted from consideration, namely

  • What was the specific problem that needed solving? Nowhere is there mention of the number of staff in each department that needed to be housed and other activities that needed to be accommodated.
  • What were the options considered to solve the public works problem?
  • Was the identified solution affordable?

2 – The cost

Council awarded the Public Works Facility Design contract to SAHURI + Associates Architecture Inc., at a cost of $70,000 plus applicable taxes. Their report provided the following cost breakdown for Council and Staff to consider.

The new buildings will be:

The Public Works (bays and rooms)Main floor6438 sq. ft.
Second floor5995 sq. ft.
 Total12,433 sq. ft.
3 cold storage buildings at 1657 sq. ft. each = 4,972 sq. ft.
The total new construction =  17,405 sq.ft
The old firehall is 3,950 sq.ft. which is to be renovated

To summarize:

Public Works BldgStorageOld Fire HallTOTAL
Construction$6,451,651$1,990,168 $789,136$9,230,955
Contingency$1,180,102 $364,079$144,864 $1,689,045
$7,631,753$ 2,354,247 $934,000  $10,920,000
The cost per square foot:$613.83/sq. ft.$473.50/sq. ft.$236.45/sq. ft.

Contrast that to the community hall with a construction cost of $5,819,870 for an estimated 14,000 square feet, equating to $416 per square foot.

One must ask, why is the cost of building a workshop/office space, cold storage, and renovating an existing building more than the cost of building the new community centre and childcare facility? 

CAO Seibel offered the following statement in his report to Council

“We are currently seeing 30-50% increases in price escalation for capital infrastructure projects. It should be noted that this cost estimate is approximately 40% higher than the preliminary numbers provided in the fall of 2021. It is imperative that we have an appropriate contingency to guard against cost escalation.”

If there is so much uncertainty about the cost of building, is it a good time to build?  Perhaps not.

3 – Financing

The proposed financing of $8.5 million over 30 years will result in annual payments of $ 526,800. Which will mean a 7.4% increase in taxes at the current rate.

Is this $10.9 million project affordable?  What is the life of the proposed structures?  Will they need major alterations, changes, or replacement by the time the loan is paid off?

The CAO in his report has proposed to soften the blow of the borrowing by only adding 2.5% in year 1 and 2 and 2.4% increase in year 3. How is he doing this? By using the savings on hand from Community Works Funding and the Building Reserve to subsidize the loan payments for the first 3 years.

Are we using our savings account to make us feel comfortable with a large debt payment!

It should be noted that the Finance Committee in December of 2021 also recommended a return of a 1% tax increase to build up the Road Reserve Fund. 

Coldstream Council forgot to mention that additional increase in their pitch for this project. 

4 – Growth Predictions

The CAO’s report continues with the following statement:

“We will realize new growth tax revenues coming in the coming years from the significant development activities currently underway in the community. These amounts could reduce the annual tax adjustment in the year they are realized.”

Historical growth over the last 10 years shows the following:

20 years to 64 years of age61606105
65 years +21151625
Source: Statistics Canada Census Data in the 2021 Coldstream Annual report (page 58)

The growth rate amongst the residential taxpayers has been a meager 95 people per year. Considering that 91.37% of Coldstream’s tax revenue comes from residential taxes and Coldstream’s track record of population growth and or lack of any substantial increased industrial tax base, it is difficult to comprehend the CAO’s growth prediction. More importantly, the only real growth appears to be in the over 65-year-old seniors, who all receive tax discounts.

5 – Is the existing Public Works Yard in the appropriate long-term location?

The last time this conversation was held was in 2011, when similar discussions were held regarding the referendum for the borrowing of a $1.35 million to build a new Mechanic Shop. Back then, the Morning Star reported that the same arguments were presented to the taxpayers:

“We need to improve this building for health and work safety,” said Coun. Bill Firman. “But I have never seen evidence before this council.”

More importantly, there were many who suggested in 2011 that the current location of the public works yard doesn’t fit in with Coldstream’s plans to develop a town centre in the future. And that was before we built a Childcare Facility and Community Hall right next door. 

Would it not be worth looking for a more suitable “industrial location” for a public works yard?

There seems to be no mention of the impact of disruption to the function of the Public Works Yard as a $10.92 million construction project takes place. This should be a valid reason in of itself to look at relocation. 

Exactly what alternatives were identified and considered before the final solution was offered up to Council for consideration?

6 – Has the Council and CAO dropped the ball on this one?

The question we have is, where were our elected officials and District staff on this subject years ago? Clearly the “end of life” and “worksafe issues” didn’t manifest themselves in January 2022. Some of our elected officials have been walking through the Public Works Yard and Buildings for well over a decade (one councillor for over 2 decades); did you not notice the deterioration that you are sounding the alarms about now? Had efforts been undertaken well before a Heritage Society asked for the old house and right after the last election to identify this as a priority, proper planning and funding options could have been pursued.

Likewise, there is no mention in the reports that have been made public about how and  what specific benefits this project will have both to the community and to the various departments that will be affected.  How and when will they be measured?

Two years ago, you could have borrowed the same money at 1.8% (or possibly less) and had an annual payment of $366,888. The proposal before us now quotes payments of $526,800 which we calculate is at an interest rate of 4.7%

$160,000 per year is quite the difference, …over the 30 years it is $4.8 million.

The proposed financing of this project as presented will cost $15,804,000 over the 30 years

Tell Coldstream Council and Senior Staff that you are not convinced that this project is supported by the information made available for you to consider.  ……. Requiring a 7.4% TAX INCREASE.

VOTE NO on October 15th!

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