Events centre fits plan
Tuesday, May 07, 2013
Times & Transcript
http://22864.vws.magma.ca/index.php?&article_id=10990
By: Brent Mazerolle
City of Moncton's 30-year scenario suggests downtown centre is feasible; would add just one cent to tax rate
Like all long-range plans, the 30-year financial plan presented by the City of Moncton's chief financial officer John Martin last night was built from a number of assumptions. That must be said at the outset.
Nevertheless, the scenario put forward, based on weeks of exhaustive research and accepted accounting practices, painted an optimistic picture of the next three decades in Moncton.
Martin's plan allows the municipality to both effectively address the city's infrastructure deficit, city council's first priority, while still revitalizing downtown with a multi-purpose events centre, council's second priority, all while keeping the property tax rate 'reasonable in the short term and manageable over the long term.' Addressing the infrastructure deficit doesn't mean eliminating it, but rather managing it in a deliberate, effective way.
'It's important to realize we will always have an infrastructure deficit,' Martin said, noting every municipality does, for the same reason people's cars lose value the minute they're driven off the lot. Every building, every road, every sewer starts depreciating from the moment it is built.
As for the events centre, Martin said it could be built under the plan with just one cent added to the tax rate. That would mean an extra $15 on the annual tax bill for a $150,000 home.
What was presented last night was 'scenario number three,' and Martin warned council the city could easily be at scenario number six or higher before ground is broken.
However, Martin said his staff has done enough detailed work at this point, 'the model is robust enough that new information can be punched in,' as it becomes known and the ripple effects seen without starting from scratch each time.
The biggest assumption of all contained in the 30-year plan is that the events centre could cost $105.4 million. At this point, three potential development consortia have responded to a request for qualifications issued by the city, but until the three provide their submissions to the City of Moncton's anticipated request for proposals, there is still no way of knowing what precisely will be built and at what cost.
At this point, council hasn't even voted to go ahead and issue an RFP, but if it does go ahead, it would likely only be about a year from now that proposals will be submitted, evaluated and made public.
Working from the $105-million figure and rounding off a bit for simplicity,
the Martin plan assumes the federal and provincial governments would each contribute $24 million to the events centre project. Another $10 million would come from public fundraising, while $10 million more - this to purchase the Highfield Square property and demolish and clean up the site - would come from the city's capital reserves.
The City of Moncton would further take on $38 million in debt. Missing from those estimates is the likelihood any consortium making a proposal will likely be offering investment of its own.
That's the breakdown of capital costs.
Annual operating costs, estimated at about $3.5 million per year, would come from windfalls the city council has already decided to dedicate to the events centre cause - the estimated $1.6-million policing rebate it gets each year from the federal government for federal policing work done by the Codiac Regional RCMP, and the $920,000 it gets each year in property tax from Casino New Brunswick.
As well, the Moncton Hoteliers Association and Downtown Moncton Centre-Ville Inc. have both committed to long-range funding worth a million dollars per year.
Martin's 30-year projection even sees the city's debt ratio - that is, the amount it spends of every dollar paying on debt - reducing from its current 15.3 per cent to about 10.4 per cent.
While it is difficult to distil hours of detailed financial discussions into a few dozen lines, the councillors generally seemed pleased with the level of detail and care put into the report, and the model it now gives them to work with as further decision points come along.
Later this month, the evaluation of the respondents to the city's request for qualifications continues with interviews. City staff will likely go before council at the first public session in June with recommendations on how to proceed from there.
personal note - It is interesting to see the difference in the coverage of this news story when comparing the T&T to the CBC. The T&T did not mention Coun, Bourgeois and his comments at the presentation about how only the "elite" want an events centre and that the "little people" are more interested in keeping toxic sludge out of their basements. The CBC on the other hand spent quite a bit of time airing the grievances of the self proclaimed leader of the opposition on city council. These two news organizations certainly are approaching this issue from very different perspectives. The T&T is unabashedly boosterish, but the CBC is perhaps a little too negative. The truth lies somewhere in the middle.
In any event, I find it very surprising that the entire $3.5M estimated annual operating cost of the centre can be found in existing revenue streams or prior commitments (RCMP rebate, Casino NB and local hoteliers). I find this very encouraging!! 