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Staff Report
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Report To: Council
Date of Meeting: September 25, 2023
Submitted By: Trevor Pinn, Deputy CAO/Treasurer
Reviewed By: Mary -Anne Dempster, CAO
File Number:
Report Number: FSD-035-23
Resolution#:C-122-23, C-123-23,
C-125-23, C-130-23
By-law Number:
Report Subject: South Bowmanville Recreation Centre Funding
Recommendations:
1. That Report FSD-035-23, and any related delegations or communication items, be
received;
2. That Council provide direction on the preferred option and associated actions as
presented in this report:
a) Option 1 — Twin Pad Arena/Aquatic Centre/Gymnasium/Walking Track/Multi-
Purpose Rooms/Outdoor Skating Rink
• That Council approve Option 1, as outlined in this report;
• That Council approve the revised project cost $152,907,629 to be funded
through debenture funding at the discretion of the Deputy CAO/Treasurer;
b) Option 2 — Aquatic Centre/Gymnasium/Multi-Purpose Rooms/Soccer Dome
with Walking track/Outdoor Skating Rink
• That Council approve Option 2, as outlined in this report;
• That Council approve the revised project cost of $90,218,381 to be funded
through debenture funding at the discretion of the Deputy CAO/Treasurer;
c) Option 3 — Twin Pad Arena/Gymnasium/Multi-Purpose Rooms/Soccer Dome
with Walking Track/Outdoor Skating Rink
• That Council approve Option 3, as outlined in this report:
• That Council approve the revised project cost $124,134,989 to be funded
through debenture funding at the discretion of the Deputy CAO/Treasurer;
Municipality of Clarington
Resort FSD-035-23
Page 2
d) Option 4 — Gymnasium/Multi-Purpose Rooms/Soccer Dome with Walking
Track/Outdoor Skating Rink
• That Council approve Option 4, as outlined in this report;
• That Council approve the project cost of $64,837,402;
That per Resolution #GG-072-22, Option 4 be funded in the amount of
$65,000,000 as included in the 2022 capital budget will be financed through
debenture;
3. That the CAO be given delegated authority to negotiate a revised proposal with
Colliers Project Leaders for project management services for the project;
4. That the Outdoor Skating Rinks identified in Report FSD-035-23 be approved to a
maximum of $8,000,000 and that the Deputy CAO/Treasurer is authorized to make
an application to the Region of Durham for the necessary debentures for both the
Outdoor Skating Rinks and the South Bowmanville Recreation Centre, such terms at
the discretion of the Deputy CAO/Treasurer not to exceed 20 years in any single
issue;
5. That the Deputy CAO/Treasurer is authorized to split the debenture into phases at
their discretion and in consultation with the Region of Durham
6. That the CAO be given delegated authority to award contracts for the construction of
the two outdoor skating rinks, given an upset budget of $8,000,000; and
7. That all interested parties listed in Report FSD-035-23, and any delegations be
advised of Council's decision.
Municipality of Clarington Page 3
Report FSD-035-23
Report Overview
This report is seeking direction from Council on the preferred plan to develop, design, and
construct the new South Bowmanville Recreation Centre (SBRC). The intent is to provide a
variety of options that will best address the recreation and leisure needs of our residents
while at the same time considering both the capital project and preliminary operating budget
costs of each option.
This follows the approval to pause the project in February 2023 due to construction market
challenges, rising interest rates and some uncertainty as to what specific amenities are
needed to serve all residents of Clarington.
All options presented include the necessary amenities to address the immediate need for
program and activity space for registered and drop -in programs in Bowmanville. This will be
achieved by constructing a large double gymnasium, indoor walking track, and multi -use
program/activity space. The options presented also include the construction of a refrigerated
outdoor skating rink, as requested by Council in February 2023.
It is the recommendation of staff that when considering the options outlined in this report,
Council do so with the intention of finalizing the indoor facility expansion at the South
Bowmanville site. This would allow Council to focus any future indoor development
recommendations arising from the Parks, Recreation and Culture Master Plan (PRCMP) that
is currently underway. While the options provided in this report will serve the recreation and
leisure needs of the residents of Bowmanville, there is also a benefit for residents across the
Municipality.
Staff are also seeking approval for the proposed outdoor skating rink plan to construct
refrigerated outdoor rinks at Courtice Community Complex (CCC) and Diane Hamre
Recreation Complex (DHRC). The project would see the CCC rink operational for November
2024 and the DHRC rink operational for November 2025.
1. Background
1.1 At the February 27, 2023, Joint Committee meeting, Report CAO-006-23 was
presented. The recommendations included pausing the SBRC project, expediting the
PRCMP to better inform the needs of the community, and directing staff to prepare the
design and costing for the construction of outdoor refrigerated skating surfaces to be
located centrally, westerly, and easterly within Clarington.
1.2 This decision was primarily based on the rising cost estimates for constructing the
proposed facility due to construction market challenges and the rising debenture debt
borrowing costs.
Municipality of Clarington
Report FSD-035-23
Page 4
1.3 At its meeting on January 31, 2022, the Committee approved the construction of a
swimming pool, twin pad arena, gymnasium and associated administrative space
(excluding library, wellness centre and multi -purpose community space) to be built in a
single-phase and debentured at an estimated cost of $65.1 million.
1.4 A debenture was issued in June 2022 for $26.4 million, with interest ranging from 3.35
percent to 4.75 percent, representing $20 million for the South Bowmanville project. An
additional debenture was planned to be issued in 2023 or 2024 for the balance of the
project cost.
2. Parks, Recreation & Culture Master Plan (PRCMP)
2.1 The 2023 budget approved funding for completing Clarington's PRCMP. The Master
Plan will provide Council and staff with a guide to make decisions towards 2036 when
Clarington is expected to reach 162,640 residents, which is a growth of 60% compared
to the 2021 Census population of 101,427. Existing and projected population
projections, utilization and participation data, facility provision levels and trends, and
community consultations will form the foundation of the Master Plan.
2.2 Staff have initiated this work with Monteith Brown Planning Consultants (MBPC), and
the Plan is expected to be completed in September 2024, with significant findings and
recommendations presented to the working group in May 2024. However, we have
discussed this report and the proposed options with MBPC, and they have provided
some comments for our consideration.
2.3 Based on previous studies completed for Clarington and their understanding of
projected growth and associated recreation and leisure trends, MBPC observed that the
proposed gymnasium, walking track and multi -purpose program and activities spaces in
all four options have merit.
2.4 At this time, it would be premature for MBPC to provide a conclusive opinion on
constructing indoor ice pads and/or swimming pools. This level of analysis will form part
of the PRCMP work. However, based on their previous work with the Municipality, they
are aware that we currently operate two older facilities, Darlington Sports Centre, and
the Alan Strike Centre. As we will state in this report, any decision on these amenities
will trigger consideration of a review of the viability of these two facilities in our longer -
term plans.
3. Facility Project Options
Option #1 — Twin Pad Arena/Aquatic Centre/Gymnasium/Walking Track/Multi-
Purpose Rooms/Outdoor Skating Rink
Municipality of Clarington Page 5
Report FSD-035-23
3.1 This option generally represents the facility development plan that was approved by
Council in the 2022 capital budget. Additionally, this option includes the addition of a
refrigerated outdoor skating rink. This addition addresses the direction from Council to
locate one of the three outdoor rinks centrally in the municipality.
3.2 Currently, the Municipality operates five arena pads; there are two additional board -
operated single -pad arenas in Clarington. If Council approves this recommendation,
staff, with the assistance of the findings in the PRCMP report, will assess the mid to
longer -term demand for ice across the Municipality.
3.3 In 2010, a major renovation was completed on the Darlington Sports Centre. The
objective at the time was to extend the arena's useful life for 10-15 years (to 2025). If it
is determined that the demand for ice time is diminishing, staff will consider re -
purposing this facility to non -ice activities. By operating the facility as a year-round "dry
pad," we can facilitate lacrosse, ball hockey, pickleball, and other uses. This type of
operation would generate floor rental revenue for 12 months, with a reduction in the
facility's annual operating costs. Any operational savings will help offset the tax levy
impact of the new facility.
3.4 With the construction of a new aquatic facility in South Bowmanville, the continued
operation of the Alan Strike Aquatic & Squash Centre will need to be reviewed. Again,
the findings in the PRCMP will be critical to this review, and staff would be considering
re -purposing this facility for other recreation and leisure activities. Any operational
savings will help offset the tax levy impact of the new facility.
3.5 This facility plan will effectively address Bowmanville's lack of programming space. The
lack of facilities results in minimal registered and drop -in programs for our residents.
With access to school gymnasiums a programming challenge, especially post -
pandemic, there is only one full-sized gymnasium in Clarington. This deficiency was
noted in the 2017 Indoor Facilities Development Strategy and has only worsened as our
population has grown.
3.6 The same situation exists for indoor programs and activity spaces in Bowmanville.
Currently, staff program preschool, children, and fitness activities in the community hall
at the Garnet Rickard Complex. The space is not ideal for this type of programming and,
with the other competing needs of the space for events, cannot satisfy our residents'
growing demands.
3.7 The refrigerated outdoor skating rink will provide a unique opportunity for our residents
to enjoy an extended outdoor skating season that would ideally operate from late
November into March. For the remainder of the year this space would be an ideal
location for other outdoor activities such as markets and pickle ball. This "civic square"
will be a focal point for the entire facility.
Municipality of Clarington Page 6
Report FSD-035-23
3.8 The following capital project costing and preliminary operating budget information is
provided:
Capital Costs
Estimated Project Budget
Design Services (8.6% of Construction/Site Development) $11,438,000
Project Management 500,000
Construction 125,000,000
Site Development 8,000,000
Construction Contingency (2.5 % of Construction Cost/Site 3,325,000
Development)
Furnishings, Fixtures & Equipment 2,000,000
Sub -Total $150,263,000
Net HST (1.76%) 2,644,629
Total $152,907,629
Notes:
1. Due to site constraints, construction of a new indoor soccer dome is not feasible with
this option, existing indoor field will be maintained.
2. Indoor walking track to be integrated into gymnasium design.
3. This option would fill out the northern piece of this property and would not
accommodate future indoor development.
Operating Costs:
Municipality of Clarington Page 7
Report FSD-035-23
3.9 The following assumptions were used in determining this preliminary operating budget:
• Twin pad arena will operate year-round and will provide additional ice to existing
users as well as accommodate new users.
• Introduction of learn to skate program and expansion of public skating schedule.
• Existing indoor soccer field will remain, with some growth expected.
• Swimming pools will accommodate lessons, public swimming, and swim club
rentals.
• Gymnasium and program/activity space will generate rental revenue and
accommodate recreation, older adult, and fitness programs.
• Facility will accommodate an expanded summer camp program and better integrate
the outdoor spaces.
• Revenue from facility name rights or sponsorships has not been factored into the
budget at this time.
• Full-time Facility Supervisor, Aquatic and Recreation Programmers will be located in
this facility.
• Facility will operate seven days per week from 6am — 12am and will be adequately
staffed with qualified full-time operators.
• Customer service staff will be scheduled, as needed, during facility operating hours
Revenues
Facility Rental Revenues
Program Revenues
Other Revenues
Facility Capital Surcharge
Total Revenue
Expenditures
$1,202,000
845,900
75,000
175,000
$2,297,900
Municipality of Clarington
Report FSD-035-23
Page 8
FT Salaries, Wages, Benefits 11275,700
PT Salaries, Wages, Benefits 1,455,600
Materials & Supplies 136,800
Utilities 687,100
Contracted Services 324,500
Total Expenditures 3,879,700
Net Levy $1,581,800
Less Projected 2026 BIS Net Levy* (175,000)
Revised Net levy $1,406,800
* Excludes Debt Servicing Costs
Option #2 — Aquatic Centre/Gymnasium/Multi-Purpose Rooms/Soccer Dome with
Walking Track/Outdoor Skating Rink
3.10 This option does not include the twin pad arena but does include the refrigerated
outdoor skating rink. With the additional space available on the site without the arena,
staff are also proposing the addition of a soccer dome, including a walking track around
the perimeter of the field. This field would replace the existing indoor field, which would
be renovated to accommodate a large double gymnasium.
3.11 The current indoor soccer field was opened in 2005 and was intended to serve the
needs of the Darlington Soccer Club's indoor house league program. At that time, there
were few indoor soccer options in Durham Region, and youth and adult usage at our
facility was strong during the October — March indoor season. This trend continued until
surrounding municipalities constructed larger indoor fields.
3.12 The proposed soccer dome can be constructed more cost-effectively than traditional
building construction. The current indoor soccer field dimensions limit the level of play
that can accommodated on this field. Building a new domed field will significantly
expand the range of soccer and other activities. While the current field is suitable for the
Darlington Soccer Club's indoor youth house league program, there are limitations with
accommodating the Rep program and other higher levels of indoor play.
Municipality of Clarington Page 9
Report FSD-035-23
3.13 The current indoor soccer field is a popular location for our drop -in indoor walking
program. By incorporating the walking track into the soccer field perimeter construction,
a longer rubber -based track will increase the popularity of this location. Staff will also be
able to develop new walking programs, and there will be benefits for the existing
Lakeridge Health Cardiac Rehabilitation Program.
3.14 The following capital project costing and preliminary operating budget information is
provided:
Capital Costs:
11 Er -r6• - NE -
Design Services (8.6% of Construction/Site Development) $6,708,000
Project Management 500,000
Construction 70,000,000
Site Development 8,000,000
Construction Contingency (2.5 % of Construction Cost/Site 1,950,000
Development)
Furnishings, Fixtures & Equipment 1,500,000
Sub -Total $88,658,000
Net HST (1.76%) 1,560,381
Total $90,218,381
Notes:
Municipality of Clarington Page 10
Report FSD-035-23
1. Outdoor Skating Rink refrigeration system will be required with this option.
2. Indoor Walking Track to be designed on soccer dome interior perimeter.
3. This option would fill out the northern piece of this property and would not
accommodate future indoor development.
Operating Costs:
3.15 The following assumptions were used in determining this preliminary operating budget:
• The existing indoor soccer facility will be renovated into a large double gymnasium.
• The new soccer dome will provide a full-sized indoor field that will attract higher
levels of play, split field usage and year-round play.
• Swimming pools will accommodate lessons, public swimming, and swim club
rentals.
• Gymnasium and program/activity space will generate rental revenue and
accommodate recreation, older adult, and fitness programs.
• Facility will accommodate an expanded summer camp program and better integrate
the outdoor spaces.
• Revenue from facility name rights or sponsorships has not been factored into the
budget at this time.
• Full-time Facility Supervisor, Aquatic and Recreation Programmers will be located in
this facility.
• Facility will operate seven days per week from 6am — 12am and will be adequately
staffed with qualified full-time operators.
• Customer service staff will be scheduled, as needed, during facility operating hours.
Revenues
Facility Rental Revenues
Program Revenues
Other Revenues
$517,000
75,000
Municipality of Clarington
Report FSD-035-23
Page 11
BudgetDollar
Facility Capital Surcharge
Amount
75,000
Total Revenue
$1,517,900
Expenditures
FT Salaries, Wages, Benefits
980,400
PT Salaries, Wages, Benefits
Materials & Supplies
Utilities
Contracted Services
1,254,600
126,000
551,000
253,700
Total Expenditures
$3,165,700
Net Levy $1,647,800
Less Projected 2026 BIS Net Levy* (175,000)
Revised Net levy $1,472,800
* Excludes Debt Servicing Costs
Option #3 — Twin Pad Arena/Gymnasium/Multi-Purpose Rooms/Soccer Dome with
Walking Track/Outdoor Skating Rink
3.16 With the inclusion of a twin pad arena in this option, the comments regarding future ice
needs apply in this case. If this goes forward, staff will consider the future for Darlington
Sports Centre and the possible re -purposing.
3.17 With no aquatic centre proposed, the overall building footprint would accommodate the
construction of the domed indoor soccer field, with the walking track.
3.18 The following capital project costing and preliminary operating budget information is
provided:
Capital Costs:
Municipality of Clarington
Report FSD-035-23
Estimated Project Budget mi
Design Services (8.6% of Construction/Site Development)
Project Management
Construction
Site Development
Construction Contingency (2.5 % of Construction Cost/Site
Development)
Furnishings, Fixtures & Equipment
Net HST (1.76%)
Notes:
Page 12
$9,288, 000
500,000
100,000,000
�M
2,700,000
1,500,000
Sub -Total $121,988,000
2,146,989
Total $124,134,989
1. Outdoor Skating Rink to be integrated into twin pad refrigeration system.
2. Site constraints will limit any further indoor expansion on this site.
3. This option includes renovating existing indoor field to gymnasium space.
Operating Costs:
3.19 The following assumptions were used in determining this preliminary operating budget:
• Twin pad arena will operate year-round and will provide additional ice to existing
users as well as accommodate new users.
0 Introduction of learn to skate program and expansion of public skating schedule.
Municipality of Clarington
Report FSD-035-23
Page 13
• The new soccer dome will provide a full-sized indoor field, that will attract higher
levels of play, split field usage and year-round play.
• Gymnasium and program/activity space will generate rental revenue and
accommodate recreation, older adult, and fitness programs.
• Facility will accommodate an expanded summer camp program and better integrate
the outdoor spaces.
• Revenue from facility name rights or sponsorships has not been factored into the
budget at this time.
• Full-time Facility Supervisor, and Recreation Programmer will be located in this
facility.
• Facility will operate seven days per week from 6am — 12am and will be adequately
staffed with qualified full-time operators.
• Customer service staff will be scheduled, as needed, during facility operating hours.
Revenues
Facility Rental Revenues $1,397,000
Program Revenues 264,000
Other Revenues 75,000
Facility Capital Surcharge 150,000
Total Revenue $1,886,000
Expenditures
FT Salaries, Wages, Benefits 972,400
PT Salaries, Wages, Benefits 656,400
Materials & Supplies 66,000
Municipality of Clarington
Report FSD-035-23
Utilities
Contracted Services
Total Expenditures
Net Levy
Less Projected 2026 BIS Net Levy*
Revised Net levy
* Excludes Debt Servicing Costs
Page 14
621,000
273,700
2,589,500
$703,500
(175,000)
$528,500
Option #4 — Gymnasium/Multi-Purpose Rooms/Soccer Dome with Walking
Track/Outdoor Skating Rink
3.20 This option was developed considering the previously approved project budget of
$65.1 M and could be considered as the first phase of a two-phase overall site
development plan. The primary focus of this option is to provide residents with the
much -needed community program space in the gymnasium and multi -purpose rooms.
The soccer dome construction will also provide a better facility that will attract higher -
level soccer play as well as other activities.
3.21 The following capital project costing and preliminary operating budget information is
provided:
Capital Costs:
Estimated Project 8udget
Aid
Design Services (8.6% of Construction/Site Development) $4,816,000
Project Management 500,000
Construction 50,000,000
Municipality of Clarington
Report FSD-035-23
Site Development
Construction Contingency (2.5 % of Construction Cost/Site
Development)
Furnishings, Fixtures & Equipment
Net HST (1.76%)
Notes:
Page 15
6,000,000
1,400,000
1,000,000
Sub -Total $63,716,000
1,121,402
Total $64,837,402
1. This option includes renovating existing indoor field to gymnasium space.
2. This building footprint of this option would accommodate further expansion on this site
in the future.
Operating Costs:
3.22 The following assumptions were used in determining this preliminary operating budget:
• The existing indoor soccer facility will be renovated into a large double gymnasium.
• The new soccer dome will provide a full-sized indoor field that will attract higher
levels of play, split field usage and year-round play.
• Gymnasium and program/activity space will generate rental revenue and
accommodate recreation, older adult, and fitness programs.
• Facility will accommodate an expanded summer camp program and better integrate
the outdoor spaces.
• Revenue from facility name rights or sponsorships has not been factored into the
budget at this time.
Municipality of Clarington
Report FSD-035-23
Page 16
• Part-time Facility Coordinator Full-time Recreation Programmer will be located in this
facility.
• Facility will operate seven days per week from 6am — 12am and will be adequately
staffed with qualified full-time operators.
• Customer service staff will be scheduled, as needed, during facility operating hours.
BudgetDollar
Revenues
Facility Rental Revenues
Programs Revenue
Other Revenue
Amount
$497,000
234,000
42,000
Facility Capital Surcharge
75,000
Total Revenue
$848,000
Expenditures
FT Salaries, Wages, Benefits
PT Salaries, Wages, Benefits
487,300
576,000
Materials & Supplies
Utilities
41,000
340,000
Contracted Services
139,500
Total Expenditures
$1,583,800
Net Levy
$735,800
Less Projected 2026 BIS Net Levy*
(175,000)
Revised Net levy
* Excludes Debt Servicing Costs
$560,800
Municipality of Clarington Page 17
Report FSD-035-23
4. Project Management Services
4.1 In September 2022, Colliers Project Leaders was awarded a contract to provide project
management services to assist the Municipality with developing, designing, and
constructing this recreation centre. Following the decision to pause the project, the
contract with Colliers was cancelled, and work completed to date was invoiced and paid
in full.
4.2 Given the amount of background work completed before the decision to postpone, there
is an economic benefit to obtaining approval from Council to re-engage Colliers to
complete this project. If approved, municipal staff will request a revised fee proposal for
project management services, working on behalf of the Municipality, on this design -bid -
build project. We will also request a revised project schedule that is intended to align
with the projected opening of this facility in 2026.
5. Proposed Outdoor Skating Rinks Program
5.1 At the February 20, 2023, Joint Committee meeting, the following resolutions were
approved:
That Staff be directed to prepare a design and costing proposal to create an
outdoor refrigerated skating surface (trail and/or pad) with a budget not to exceed
$20 million of the funds earmarked for the South Bowmanville Recreation
Complex."
That a central skating location be explored first, with a Western (Courtice) and
Eastern (Newcastle/Orono) to be considered based on budgetary feasibility; and
That the changes in the project scope be funded by the previously approved
debenture and development charges for the South Bowmanville Recreation
Centre.
5.2 Staff are recommending the addition of an outdoor skating rink in all the South
Bowmanville options in this report that will effectively address the desire to have an
outdoor rink located centrally within the municipality.
5.3 Based on preliminary investigations into potential locations, staff recommend the two
additional outdoor skating rinks be built at the Courtice Community Complex and Diane
Hamre Recreation Complex. The Courtice location is planned to be operational in
November 2024, with the Newcastle rink to be operating in November 2025.
Municipality of Clarington Page 18
Report FSD-035-23
5.4 The outdoor skating rinks are planned to be 60" X 120" oval skating pads. They will
provide 4-5 months of skating during the winter season. Mechanical and equipment
rooms will be constructed adjacent to the pads. These concrete pads will deliver multi-
use opportunities during the non -winter seasons, including pickleball courts, market
areas, etc. These rinks are intended to operate with minimal staffing resources;
however, we will need to increase the operating budgets for increased utility and
maintenance costs.
6. Financial Considerations
Current Economic Considerations
6.1 In its July 2023 Monetary Policy Report, the Bank of Canada has renewed the flexible
inflation -targeting strategy until December 2026. The current target is 2% within a range
of 1 % to 3%. This target is for the Consumer Price Index (CPI), which does not reflect
the building costs that impact the Municipality of Clarington; however, stable consumer
inflation can assist in mitigating building indices.
6.2 In June 2022, inflation was approximately 8.1 %; in June 2023, it was 2.8%, indicating a
return to the target range. While this is not indicative of long-term inflation, it does
suggest that the measures taken in the past twelve months are working to reduce
inflation to the average level.
6.3 The critical tool the Bank of Canada used to reduce inflation was to increase interest
rates to slow the economy. This impacts the Municipality and residents by increasing
the cost of borrowing. Over the past ten years, interest rates have been relatively low
compared to current interest rates.
6.4 While interest rates are expected to level off, Staff expect a slower return to a lower
interest rate. The following chart shows the interest rates since 1992; the current rate is
not unusual given the past 30-year trend.
Municipality of Clarington
Report FSD-035-23
.......................................
I QQ� 1998 2004
14.00
12.00
10.00
8.00
6.0015
4.00
2.00 %
............. 0.00
20f6 2022
TRADIHGECOHOWCS.COU I &MK OF C_-:=
Page 19
(source: Canada Interest Rate - 2023 Data - 1990-2022 Historical - 2024 Forecast -
Calendar (tradingeconomics.com)).
6.5 Given the current interest rates and historical trends, it is not advisable to delay
construction to try to "time the market." It is not sure when or if interest rates will return
to the levels of 2020 to 2022 or even the 2.00% levels seen before the COVID-19
Pandemic.
6.6 Staff have assumed an interest rate of 5.00% in the debt projections for this report.
Given the volatility in the interest market, the Region of Durham could not provide a
forecast for indicative rates; however, the Region provided a chart comparing the
historical indicative rates to the Bank of Canada rate.
Municipality of Clarington
Report FSD-035-23
Page 20
6.7 While there was a spread between indicative rates and the Bank Rate, this spread has
decreased over the past two years. This results from market expectations of the interest
rate in the long term. The actual interest rate will be locked in when the Region of
Durham issues the debenture, Staff will be working with the Region to optimize the
timing of debentures to maximize the benefit to the Municipality.
Funding Strategy and Debt Implications
6.8 The Municipality of Clarington collects development charges on new development to
fund capital -related expenses to support growth in the community. As part of this
charge, some development charges are collected for recreational services and facilities
including indoor and outdoor amenities. The South Bowmanville Recreational Facility
was identified as part of the 2021 DC Study, as well as other outdoor amenity spaces.
6.9 Development charges will only pay for the growth component; historical caps and
benefits to existing taxpayers are factored into the eligibility calculation. It is estimated
that 70% of the cost of the recreation centre is eligible for development charge recovery.
This amount has been included in the projections.
Municipality of Clarington Page 21
Report FSD-035-23
6.10 The Municipality is allowed to borrow from internal resources to fund long-term debt.
This may be done from Development Charges Related Reserve Funds or another
source; however, any long-term debt, even those from internal sources, must be done in
consultation with the Region of Durham.
6.11 The Municipality is restricted by the Municipal Act 2001 to an Annual Repayment Limit
(ARL), which is equal to 20% of the Municipality's own source revenue. The current
ARL is $22,029,858, with approximately $19,890,500 available January 1, 2023.
Although debt may be funded through development charges, the debt servicing costs
(principal plus interest) still count towards the ARL. Further, while development charge -
funded debt counts towards the debt limit, the development charge revenue does not
count towards the "own -source revenue"; it is expressly excluded. This causes a
situation where high -growth municipalities may be impacted on their ability to utilize
debt for asset management if their capacity is tied towards non -tax -supported growth -
related debt.
6.12 The Municipality has outstanding debt with a current cost of $3.3 million, leaving
approximately $18.7 million of debt servicing space available.
Debt Forecast
6.13 In determining the debt limitations of the proposed four options, several general
assumptions have been made which are consistent throughout the four scenarios
presented in the following subsections.
6.14 The Municipality is working on its asset management plan to update asset conditions
and forecast the required investments to reduce the backlog and eliminate the
infrastructure deficit. For the purposes of this analysis, the current backlog has been
assumed to be cleared over a ten-year period, with debt being used to cover any
shortfall from tax levy increases and grants. While work has been assumed for the next
ten years, the debenture issued for the work is assumed to follow four years later. The
following chart shows the estimated, based on current information, capital needs in
thousands until 2032 from the Asset Management Plan and known DC needs. The
following does not include the SBRC or the Public Works Yard, which are dealt with in
the scenarios:
Municipality of Clarington
Report FSD-035-23
Capital Need ('000s)
$160,000
$139,928
$140,000 $131,609
. $122,035
$120,000 $111,901
$100,000 , $86 378$90,604
$82,077
$80,000
$60,000
$40,000
$20,000
$83,308
$70,751
$27,850
1
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Page 22
6.15 This is based on current timing; the work identified has not yet been included in
budgets, and by the time the work is budgeted, designed, and completed the ten-year
period would likely begin in 2027/2028. Therefore, the debenture issued is assumed to
be four years later.
6.16 As the Municipality refines its AMP and long-term financial plan it is anticipated that debt
needs will change, and the timing could be smoother to prevent budget volatility and
ensure stability in the tax levy.
6.17 Interest rates are assumed to be 4.00% in 2024, 3.50% in 2025 and 3.00% thereafter.
This is based on projections from CIBC economists as well as internal staff review of
economic factors. It is also assumed that debt would be issued on October 1 of each
year and that all debt is issued for 20 years.
6.18 For the purposes of determining the Municipality's ARL, the own source revenue has
been assumed to be 5.6%. This assumption is based on 4.1 % for the levy target
(including 1.5% allocated annually to capital) and 1.5% for new growth in assessment.
6.19 The following debt forecasts include the Newcastle Community Park ($3,217,500) and
funding for two outdoor rinks as identified earlier in this report ($8,000,000). The South
Bowmanville Recreation Centre and the Public Works Yard are both assumed to be
debentured over a two-year period. Short-term borrowing can be used to finance the
working capital required, including borrowing from reserve funds.
Option #1 - Twin Pad Arena/Aquatic Centre/Gymnasium/Walking Track/Multi-Purpose
Rooms/Outdoor Skating Rink
Municipality of Clarington
Report FSD-035-23
Page 23
6.20 The following debt forecast represents the required financing for Option 1 of
$152,908,000. This forecast assumes an additional $175,000 in own source revenue
based on the debt repayment surcharge.
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
Forecasted P&I payments vs ARL
■ Total P&I ❑ Annual Repayment Limit (ARL)
M -Zj- u1 l0 I- 00 0) O -1 N
O O O O O O O O O O
N N N N N N N N N N
M 1:* Ln 1.0 I, 00 M O .1 N
O O O O O O O O O O
N N N N N N N N N N
6.21 Based on the assumptions, the Municipality would meet the ARL in 2034 but would not
exceed it.
Option #2 — Aquatic Centre/Gymnasium/Multi-Purpose Rooms/Soccer Dome with
Walking Track/Outdoor Skating Rink
6.22 The following debt forecast represents the required financing for Option 1 of
$152,908,000. This forecast assumes an additional $75,000 in own source revenue
based on the debt repayment surcharge.
Municipality of Clarington Page 24
Report FSD-035-23
Forecasted P&I payments vs ARL
■ Total P&I ❑ Annual Repayment Limit (ARL)
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
M -tl- Ln lD r� 00 Gl O .1 N M -tt Ln lD r� 00 M O N
N N N N N N N M M M M M M M M M M �t �t lzt
O O O O O O O O O O O O O O O O O O O O
N N N N N N N N N N N N N N N N N N N N
6.23 Based on the assumptions, the Municipality would not exceed the ARL at any point
between now and 2042.
Option #3 — Twin Pad Arena/Gymnasium/Multi-Purpose Rooms/Soccer Dome with
Walking Track/Outdoor Skating Rink
Municipality of Clarington Page 25
Report FSD-035-23
Forecasted P&I payments vs ARL
■ Total P&I ❑ Annual Repayment Limit (ARL)
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
M -tl- Ln 00 M O 1-1 N M � Ln 00 M O N
N N N N N N N M M M M M M M M M M �t �t lzt
O O O O O O O O O O O O O O O O O O O O
N N N N N N N N N N N N N N N N N N N N
6.24 Based on the assumptions, the Municipality would not exceed the ARL at any point
between now and 2042.
Option #4 — Gymnasium/Multi-Purpose Rooms/Soccer Dome with Walking
Track/Outdoor Skating Rink
Municipality of Clarington Page 26
Report FSD-035-23
Forecasted P&I payments vs ARL
■ Total P&I ❑ Annual Repayment Limit (ARL)
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
M -tl- Ln lD r� 00 Gl O .1 N M -tt Ln lD r� 00 M O N
N N N N N N N M M M M M M M M M M �t �t lzt
O O O O O O O O O O O O O O O O O O O O
N N N N N N N N N N N N N N N N N N N N
6.25 Based on the assumptions, the Municipality would not exceed the ARL at any point
between now and 2042.
Facility Capital Surcharge
6.26 It is apparent that most municipalities are coping with competing capital priorities,
greater resident expectations and limited capital funds, and Clarington is no different.
Many municipalities have introduced facility rental and program usage surcharges to
provide alternate sources of funding for the building of new recreation facilities or by
growing reserves to fund future repairs and replacement of existing facilities.
6.27 This practice can be found in many municipalities, including in and around Durham
Region. This surcharge is supplemental to other forms of capital project funding, such
as development charges and infrastructure funding from other levels of government. In
other cases, it is a fee directed to reserve funds to finance future repairs and
replacements of building infrastructure. Examples can be found where this surcharge is
applied to rental rates, expressed as a dollar amount or as a % of the rental rate. The
fee can also be applied to program registrations, memberships and other activities and
services.
6.28 This revenue option is being considered and would need to be specifically approved by
Council. We have included a revenue line in the preliminary operating budget
summaries for each facility option Council is considering. This amount is based on a
surcharge for all facility rentals in this new facility, in addition to a charge for each
Municipality of Clarington
Report FSD-035-23
Page 27
program registration that occurs in the facility. The primary source of revenue will be
generated through a surcharge for ice rentals.
6.29 This would represent a new strategy for Clarington and at this time, we have provided
an estimate for possible revenues for this new recreation centre. Further discussion will
be needed to assess the feasibility of expanding this charge to rentals and program
activities across the Community Services department. This would involve assessing the
overall benefit of the service to the greater community versus a specific benefit to a
particular user group.
Provincial and Federal Funding Opportunities
6.30 Provincial and Federal funding grants are practical ways to offset the costs of major
capital projects. Staff have had previous success in seeking funding opportunities for
various projects. Funding for infrastructure projects is not the only opportunity, there
are also funding opportunities available to support building a sustainable Recreation
Complex in a way that puts the Municipality on a path to Net Zero and supports the
Climate Change Action Plan.
6.31 Often major infrastructure programs result in a 33-33-33% funding split, if successful
between federal, provincial, and municipal levels of government. While different funding
opportunities have different structures, this is most common with previous infrastructure
grants. Sustainability funding opportunities vary more based on funding sources and
criteria, providing an equally sound opportunity to reduce costs. While most grant
opportunities have not been announced for 2024 yet, there are some ongoing funding
opportunities; however, most require the submissions to include design and
sustainability information that will not be ready until after approvals are in place, and
some design work has been completed.
6.32 The internal Grant and Climate Administration teams will continue to work with the
project team to monitor and support funding applications to secure funding support to
offset the project costs.
Annual Operating Budget
6.33 Community Services staff have prepared a preliminary 2026 budget for each proposed
facility option. Consideration was also given to the existing Bowmanville Indoor Soccer
facility operating deficit projected for the 2026 budget year.
6.34 The estimated net levy represents a tax levy increase of approximately 0.9% (in addition
to the debt repayment amount) in the first year (2026) based on the 2023 levy. The start
date is expected to be 2026, so the actual increase is likely lower. Further, this amount
could be reduced by a naming sponsor for the facility.
Municipality of Clarington
Report FSD-035-23
Tax Levy Impacts
Page 28
6.35 The tax levy impacts of debt will assume a 70% development charge recovery, the levy
impact is shown as a percentage of the 2023 tax levy $72,443,900.
Option 1
$3,289,275
4.54%
$1,406,800
1.95%
6.49%
Option 2
1,737,920
2.40%
1,472,800
2.03%
4.43%
Option 3
2,577,341
3.56%
528,500
0.73%
4.29%
Option 4
535,499
0.74%
560,800
0.77%
1.51 %
6.36 Based on the 2023 assessment information, which is not likely to vary significantly as a
result of the assessment freeze, the average home would be impacted by $15.84 for
every 1 % increase in the levy. Therefore, the total tax levy impact to the average
household would vary between $23.92 to $102.80.
7. Concurrence
This report has been reviewed by the Director of Community Services, who concurs
with the recommendations.
8. Conclusion
It is respectfully recommended that Council provide direction on the preferred facility
development option, as outlined in this report, to best serve the residents of this
community. Upon receiving direction on the preferred development plan, staff will initiate
the procurement for design and project management services.
The South Bowmanville facility will provide the residents of Bowmanville and beyond a
community hub where programs and activities for all ages will greatly serve those
communities' recreation and leisure needs.
Municipality of Clarington
Report FSD-035-23
Page 29
Staff Contact: Trevor Pinn, CPA, CA, Deputy CAO/Treasurer, 905-623-3379 ext.2602 or
tpinn@clarington.net.
Attachments:
Attachment 1 — SBRC Proposed Facility Options, Preliminary Operating Budget
Interested Parties:
The following interested parties will be notified of Council's decision:
• The Region of Durham Finance Department
Attachment 1 to Report FSD-035-23
South Bowmanville Recreation Centre - Option #1 - Preliminary Operating
Budget
Account Name
Ice Rentals
Indoor Soccer Rentals
Lacrosse Bowl Rentals
Multi Purpose Room Rentals
Gymnasium Rentals
Pool Rentals
Advertising Revenue
Vending Commissions
Aquatic Revenue
Fitness Class Revenue
Adult 55 Program Revenue
Summer Camp Revenues
Recreation Program Revenue
Facility Capital Surcharge
Proposed Budget 2026
(Annualized)
-900,000
(190,000)
(10,000)
(42,000)
(40,000)
(20,000)
(50,000)
(25,000)
(581,900)
(35,000)
(39,000)
(60,000)
(130,000)
(175,000)
Total Revenues ($2,297,900)
FT Facility Supervisor
122,900
FT Lead Hand
83,200
FT Facility Operators (8)
596,635
FT Recreation Programmer (Upgrade from PT)
25,400
FT Aquatic Programmer
80,600
FT Clerk II
57,700
FT Benefits (32%)
309,259
PT Facility Wages
300,000
PT Aquatic Wages
548,577
PT Customer Service Wages
172,000
PT Recreation Wages
192,400
PT Benefits (20%)
242,595
Cleaning Supplies
46,800
Misc Operating Supplies
40,000
Heat
121,000
Hydro
500,000
Water/Sewer
66,100
Phone/Fax
14,700
Snow Removal
90,000
Waste Disposal
9,900
Equipment Maintenance
30,200
R/M Building
80,000
R/M Equipment
90,000
R/M Fire Equipment
9,700
Program Supplies
50,000
Total Expenditures
$3,879,667
Net Levy $1,581,767
Less Projected operating deficit for BIS 2026 ($175,000
Revised Net Levy $1,406,767
South Bowmanville Recreation Centre - Option #2 - Preliminary Operating
Budget
Account Name
Ice Rentals
Indoor Soccer Rentals
Lacrosse Bowl Rentals
Multi Purpose Room Rentals
Gymnasium Rentals
Pool Rentals
Advertising Revenue
Vending Commissions
Aquatic Revenue
Fitness Class Revenue
Adult 55 Program Revenue
Summer Camp Revenues
Recreation Program Revenue
Facility Capital Surcharge
Proposed Budget 2026
(Annualized)
0
(405,000)
(10,000)
(42,000)
(40,000)
(20,000)
(50,000)
(25,000)
(581,900)
(70,000)
(39,000)
(60,000)
(100,000)
(75,000)
Total Revenues ($1,517,900)
FT Facility Supervisor
122,900
FT Lead Hand
83,200
FT Facility Operators (5)
372,900
FT Recreation Programmer (Upgrade from PT)
25,400
FT Aquatic Programmer
80,600
FT Clerk II
57,700
FT Benefits (32%)
237,664
PT Facility Wages
175,000
PT Aquatic Wages
548,500
PT Customer Service Wages
172,000
PT Recreation Wages
150,000
PT Benefits (20%)
209,100
Cleaning Supplies
36,000
Misc Operating Supplies
40,000
Heat
121,000
Hydro
375,000
Water/Sewer
55,000
Phone/Fax
10,000
Snow Removal
75,000
Waste Disposal
9,000
Equipment Maintenance
20,000
R/M Building
60,000
R/M Equipment
70,000
R/M Fire Equipment
9,700
Program Supplies
50,000
Total Expenditures
$3,165,664
Net Levy $1,647,764
Less Projected operating deficit for BIS 2026 ($175,000
Revised Net Levy $1,472,764
South Bowmanville Recreation Centre - Option #3 - Preliminary Operating
Budget
Account Name
Ice Rentals
Indoor Soccer Rentals
Lacrosse Bowl Rentals
Multi Purpose Room Rentals
Gymnasium Rentals
Pool Rentals
Advertising Revenue
Vending Commissions
Aquatic Revenue
Fitness Class Revenue
Adult 55 Program Revenue
Summer Camp Revenues
Recreation Program Revenue
Facility Capital Surcharge
Proposed Budget 2026
(Annualized)
-900,000
(405,000)
(10,000)
(42,000)
(40,000)
0
(50,000)
(25,000)
0
(35,000)
(39,000)
(60,000)
(130,000)
(150,000)
Total Revenues ($1,886,000)
FT Facility Supervisor
FT Lead Hand
FT Facility Operators (6)
FT Recreation Programmer (Upgrade from PT)
FT Aquatic Programmer
FT Clerk II
FT Benefits (32%)
PT Facility Wages
PT Aquatic Wages
PT Customer Service Wages
PT Recreation Wages
PT Benefits (20%)
Cleaning Supplies
Misc Operating Supplies
Heat
Hydro
Water/Sewer
Phone/Fax
Snow Removal
Waste Disposal
Equipment Maintenance
R/M Building
R/M Equipment
R/M Fire Equipment
Program Supplies
Total Expenditures
Net Levy
Less Projected operating deficit for BIS 2026
122,900
83,200
447,500
25,400
0
57,700
235,744
225,000
0
172,000
150,000
109,400
36,000
0
121,000
450,000
50,000
10,000
75,000
9,000
25,000
70,000
75,000
9,700
30,000
$2,589,544
$703,544
175,000
Revised Net Levy
$528,544
South Bowmanville Recreation Centre - Option #4 - Preliminary Operating
Budget
Account Name
Ice Rentals
Indoor Soccer Rentals
Lacrosse Bowl Rentals
Multi Purpose Room Rentals
Gymnasium Rentals
Pool Rentals
Advertising Revenue
Vending Commissions
Aquatic Revenue
Fitness Class Revenue
Adult 55 Program Revenue
Summer Camp Revenues
Recreation Program Revenue
Facility Capital Surcharge
Proposed Budget 2026
(Annualized)
0
(405,000)
(10,000)
(42,000)
(40,000)
0
(25,000)
(17,000)
0
(35,000)
(39,000)
(60,000)
(100,000)
(75,000)
Total Revenues ($848,000)
FT Facility Supervisor (Perm PT)
FT Lead Hand
FT Facility Operators (4)
FT Recreation Programmer (Upgrade from PT)
FT Aquatic Programmer
FT Clerk II
FT Benefits (32%)
PT Facility Wages
PT Aquatic Wages
PT Customer Service Wages
PT Recreation Wages
PT Benefits (20%)
Cleaning Supplies
Misc Operating Supplies
Heat
Hydro
Water/Sewer
Phone/Fax
Snow Removal
Waste Disposal
Equipment Maintenance
R/M Building
R/M Equipment
R/M Fire Equipment
Program Supplies
Total Expenditures
Net Levy
Less Projected operating deficit for BIS 2026
45,500
0
298,300
25,400
0
0
118,144
165,000
0
165,000
150,000
96,000
26,000
0
75,000
240,000
25,000
5,000
50,000
7,000
10,500
35,000
25,000
7,000
15,000
$1,583,844
$735,844
175,000
Revised Net Levy
$560,844