HomeMy WebLinkAboutFND-018-13 Cladiwa REPORT
FINANCE DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: December 9, 2013 Resolution#: 91019° -7`1 By-law#:
Report#: FND-018-13 File#:
Subject: TIMING OF SOUTH BOWMANVILLE MULTI-USE FACILITY
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report FND-018-13 be received.
Submitted by: Reviewed by:
Nancy aylor, BBA,C PA,CA, Franklin Wu,
Director of Finance/Treasurer Chief Administrative Officer
NT/hj I
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T 905-623-3379
REPORT NO.: FND-018-13 PAGE 2
1. BACKGROUND
1.1 At the General Purpose and Administration Committee meeting on October 28,
2013, Committee considered Report CSD-010-13, "Clarington Fitness Centre-
Proposed Renovation". The report was tabled to the next GPA meeting. At the
November 12, 2013 General Purpose and Administration Committee meeting, the
following Resolution #GPA-545-13 was passed:
That Report CSD-010-13 be referred to Staff for a further report on when a new
multi-use facility is likely to be built in south Bowmanville.
1.2 This resolution was not amended at the Council meeting of November 19th. This
report is in response to Council's request.
2. DEVELOPMENT CHARGES STATUS
2.1 As Council is aware, the proposed future facility is contained in the Municipality's
Development Charges By-Law and Background Study. It is identified as "South
Bowmanville Multi-Use Facility Phase II" at 82,000 square feet. Phase I was
comprised of the Bowmanville Indoor Soccer Facility. The proposed timing at the
time of the preparation of the DC Background Study was design in 2016 with
potential opening in 2018. A good portion of the funding for the project was
categorized as accommodating growth in the post 2019 period.
2.2 The intent at the time of the DC Background Study was that Phase II would be
comprised of the following conceptual components:
• Twin Pad Arena
• Program/Meeting Space
• Fitness Centre
• Racquet Courts
• Lobby/Common Space
• Office and Administration
2.3 The anticipated Phase III would be comprised of a Leisure Pool, Gymnasium and
Program/Meeting Space at some time beyond the Phase II completion.
2.4 Since the DC Background Study and By-Law were approved, there has also been
much discussion surrounding additional space/location for the Clarington Older
Adults Association, although no decisions have been made at this time.
3. COMMENTS
3.1 While the DC Background Study includes projections around timing of future
facilities, the timing estimate is based on the assumptions at that time around
growth, collections, interest earned on reserve fund balances, indexing of capital
costs etc.
REPORT NO.: FND-018-13 PAGE 3
3.2 Unfortunately, while the economy was uncertain at the time and an allowance was
made for this, the depth of the economic recession and still ongoing recovery
efforts globally and here in Canada were not anticipated at that time. Nor was it
predictable that there would be the impact of servicing restraints rippling from
lower development charges collections at the Regional level.
3.3 Growth during this five year time frame of the DC Background Study was
anticipated to be in the range of 699 to 902 units per year. As Council is aware,
this growth level has not been achieved and as a result the deficit in the Indoor
Recreation Development Charges Reserve Fund has relatively stabilized at
approximately $2.1 million. Essentially, the Municipality needs in the vicinity of
525 new residential units per year to breakeven on the annual debenture
payments relating to Indoor Recreation growth related facilities. Growth in units in
excess of this would be applied to reduce the current deficit in this Reserve Fund.
3.4 The greatest variable in predicting the timing of proceeding with the South
Bowmanville Facility is the number of new units per year. This is tied extensively
to both market conditions and servicing restrictions.
3.5 The debenture debt payments pertaining to the South Courtice Arena will be
completed in 2017. This frees up indoor recreation development charges cash
flow collections. Based upon an average of 550 new residential units per year
over the next five years, it is anticipated that the Indoor Recreation Development
Charges Reserve Fund will achieve a return to positive conditions at the end of
2018. Any servicing constraints or negative economic impacts would delay this
date further.
3.6 As a result, in order to get the Indoor Recreation Development Charges Reserve
Fund back on firm positive ground, it would be recommended that an additional
facility would not likely be feasible until approximately 2020. This would be the
design phase with the facility opening in late 2022.
3.7 The other significant issue to be aware of is that the Development Charges funding
can only be utilized towards growth related facilities. This means that replacement
of facilities cannot be funded from development charges, only additional square
footage added to the municipality's service level. An indepth discussion around
development charges shortcomings is covered in a separate report to Committee
providing comments to the Province of Ontario's consultation on the Development
Charges Act currently underway.
3.8 Specifically to this issue, any replacement square footage for a pool facility would
not be eligible for growth related financing. The existing pool would need to
remain open concurrently with a new facility for the new facility to be eligible for
development charges financing. The same circumstance applies to future
discussions around the Older Adults facility or the Courtice library.
REPORT NO.: FND-018-13 PAGE 4
3.9 This does not prevent Council from proceeding with the provision of improved
facilities, but the financing would be recommended as debenture debt financing
with annual repayments from tax levy financing. There is sufficient debt capacity
available as the Municipal debt levels are well below the allowable capacity
approved by the Province. This is also an option for Council should they wish to
proceed with the proposed renovation to the Clarington Fitness Centre but do not
wish to utilize the reserve fund capacity for this project.
4. CONCURRENCE
4.1 This report has been reviewed by Joseph Caruana, Director of Community
Services, who concurs with the recommendations.
5. CONCLUSION
5.1 This report highlights the issues around growth related financing. Based on the
assumptions identified in this report, the proposed timing of the new multi-use
facility in south Bowmanville would be approximately 2020 for design
commencement and late 2022 for facility opening for eligible growth related
components. Adjustments to this timing may result from better or worse growth
activity in new residential units over the coming years.
5.2 If Council expresses its intent to have a pool facility in the Phase II development
and wants it to be eligible for development charges financing, the existing pool
would have to remain open concurrently to the opening of a new pool facility.
5.3 If Council wishes to proceed with a replacement pool at the South Bowmanville
site, there would be a need to issue debenture debt to be repaid from tax levy on
an annual basis. This is also an alternative financing mechanism for the proposed
renovations at the existing Clarington Fitness Centre. The balance of the growth
related components, unless it was a standalone facility, would have the same
timing limitations referenced in Section 5.1 above.
CONFORMITY WITH STRATEGIC PLAN
The recommendations contained in this report conform to the general intent of the
following priorities of the Strategic Plan:
Promoting economic development
Maintaining financial stability
Connecting Clarington
Promoting green initiatives
X Investing in infrastructure
Showcasing our community
Not in conformity with Strategic Plan
REPORT NO.: FND-018-13 PAGE 5
Staff Contact: Nancy Taylor, Director of Finance/Treasurer
List of interested parties to be advised of Council's decision:
Clarington Squash Club
Clarington Swim Club