Last Monday night Municipal Council considered a proposal, prepared by staff, which outlined how we could provide the $712,000 that our municipality will have to invest in the Snug Cove sewer upgrade. Of course council didn’t approve it. They deferred their decision until after more community consultation. But this time the good old deferral trick wasn’t as straight forward as usual. First of all, the clock is ticking. The $1,570,000 in federal/provincial grants that are making this project possible will disappear one year from now. And secondly our staff didn’t back off when council started dithering. Staff is going ahead with finalizing specifications and preparing tender documents. The fact that the municipal funding has not yet been finalized is just a detail and our staff is confident that our council will work things out. Before going on I have to admit that I wasn’t at the council meeting. My information is second hand, but the general thrust of these statements is probably pretty accurate.
To understand how important this meeting was, it is necessary to look back quite some time and draw several story lines together. First of all you have to know about the Surplus Lands, which are now referred to as the Community Lands. We, the municipality, purchased these 39 acres in and around Snug Cove for just over $2,000,000 back in 2005. The purchase was approved by referendum and every year your tax bill has an item to cover the interest that we are paying on the debt that we incurred to buy the land. The deal was that we would buy this land, which was then part of Crippen Park from Metro Vancouver for a very fair price. The Municipality would then sell a portion of the land over the following three years to repay the debt incurred and sell or build on the balance of the land in the fullness of time.
Then it got complicated. The value of the land rose far faster than the cost of the interest that we were paying. For every year that we paid $60,000 in interest the land was rising in value by at least ten times that amount. So council decided not to rush into anything. Task Forces were convened, consultants were hired and full public consultation was the order of the day. However in the end the process burned out a lot of people and burned up a lot of goodwill. Eventually the focus turned to the realization that the maximum return on the majority of the land could not be realized until the Snug Cove sewer system was expanded. So for the last few years a considerable amount of energy has gone into securing senior government funding for the sewer while most of the other challenges associated with the land purchase have been put on the back burner.
One of the lesser problems not dealt with was the need to generate some working capital to provide the infrastructure, including the municipality’s share of the sewer improvement, that would be necessary to maximize the value of most of the lots to be sold. Let me explain; the 39 acres acquired cover quite an area, from the Library to the other side of the Recycling Depot. Some of the land will be required for municipal buildings, some will probably remain as park, and some of it will be serviced to increase its value and sold off to provide funding for community facilities. But some of it will never be serviced and never be required for parks or facilities. This was the land that was supposed to be sold first to pay off the debt or create the working capital to facilitate the development of the more desirable lots.
Another thread in Monday night’s meeting is the staff component. Our staff includes not only a relatively new Chief Administrative Officer but also a new Head of Public Works and a new Senior Planner. These people are new to Bowen. They come from the real world. The idea that our council could possibly procrastinate to the point of losing critical grant money is simply too ludicrous to contemplate. Their naiveté may well be our saviour.
This brings me to the final thread of our Monday night drama. The proposal that staff made to provide funding for the sewer was to take money from three separate reserve funds. These included almost half of our Capital and Stabilization Fund, all of the Civic Facilities Reserve Fund and a good chunk of our Recreation and Community Reserve Fund. Needless to say, some of the people who have been counting on these funds for a performing arts centre took the time to go to the meeting and express their displeasure. Hence council’s decision to discuss the matter again before agreeing with staff’s recommendation.
Council knows that the sewer project must go ahead. But they also know that they shouldn’t pillage our reserve funds to do it. Conversely they know connection fees charged to the new users of the upgraded sewer will ultimately recoup the costs, and if finances get tight, they can always sell off a few acres of land.
So don’t worry, the sewer is a great investment and no matter how the funding is put together the fact that the reserves have to be replenished is an incentive to council to get things moving. I just wish that we had bought the land with our own reserve funds in the first place. It would have saved us hundreds of thousands of dollars in interest and may have inspired to council to sell some land on a rising market instead of waiting for it to fall.
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