Sidney could borrow up to $10 million without public approval if it decides to take that course of action on spending for its proposed replacement fire hall.
A decision in March to do just that has been delayed, however, enabling municipal employees to research all of the Town’s funding options. Sidney had earlier suggested they would pursue an alternative approval process (or counter petition), seeking public approval prior to borrowing the money.
Chief Financial Officer Andrew Hicik says council on March 29 tabled a decision from March 8 to proceed with long-term borrowing for the construction of a community safety building. The facility would house the fire department, a small fire museum, community emergency response services and the local B.C. Ambulance service.
It’s being eyed for land south of the Mary Winspear Centre and the Town this week approved signing a lease (with conditions) for that property with the North Saanich Memorial Park Society.
Hicik, in March, advised council this would be the largest borrowing Sidney has ever undertaken.
As such, he suggested council might want to have a public process on the issue, even if they decide to borrow the money outright. Hicik also told council that the public had been given the impression earlier in discussions about the project that there would be a counter-petition opportunity.
With the delay in a final borrowing decision, Hicik said he’s been tasked with preparing information for the public on all of the Town’s funding options. He said that was expected to be back to council by the end of June.
Any decision on how to proceed with borrowing, he said, is a political one, but would still have to go through a typical bylaw approval process.
Hicik outlined some of the rules for borrowing. Legislation allows municipalities to borrow up to a certain limit, called the Assent-Free Zone, or without public approval. Exceeding that limit would require special public approval.
Sidney’s limit in this zone, Hicik explained in an email follow up to an earlier interview, is based on the Town’s ability to pay for the loan.
According to Hicik, the Assent-Free annual limit is set at five per cent of the Town’s annual revenues — meaning about $962,500 in total debt payments.
Sidney is currently paying around $320,000 a year on other long-term debt. That leaves about $640,000 in debt servicing room.
The annual cost of the municipality taking out a $10 million loan would be around $540,000. As that falls under the threshold, it would allow Sidney to borrow without seeking elector assent.
Mayor Steve Price and councillors Tim Chad and Mervyn Lougher-Goodey did, on March 8, vote to proceed with the direct borrowing option. Coun. Erin Bremner and Barbara Fallot opposed the move. Coun. Cam McLennan and Peter Wainwright were not at that meeting.
On March 29, Bremner, Fallot and Wainwright opposed tabling the earlier decision, while McLennan, Price, Lougher-Goodey and Chad approved the delay.
Design plans for the community safety building are complete and have outlined the cost to be in the neighbourhood of $10 million — should B.C. Ambulance sign a lease with the Town on relocating to a purpose-built space for them there.
Hicik noted that Sidney is still anticipating only having to borrow between $5 and $8 million. However, he added it’s necessary to have a borrowing bylaw that allows access to the full construction cost.
Over the course of construction, Hicik explained, Sidney expects to offset the full cost with:
• lease payments from the B.C. Ambulance Service
• gas tax funds of anywhere between $500,000 and $1 million, and
• the sale of the current fire hall building and land for approximately $2 million.
If those come to pass, Hicik said the total borrowing the Town would have to do for the project would be less, lowering Sidney’s annual debt payments.
Alternate Approval still an option
Sidney is still considering the alternative approvals process (AAP) (or counter petition) for borrowing up to $10 million for its community safety building plan.
An AAP is conducted when a municipality wants to, or must, seek elector assent on a number of issues, notably borrowing money. The AAP is often used in place of a full referendum, to save money and time. It’s also a common perception that an AAP is used, as it’s more difficult for opponents of a proposal to reach the threshold within AAP legislation.
The rules state that in order for those opposed to an issue under an AAP to win the day, 10 per cent of electors must submit a petition expressing that opposition. In Sidney’s case, that’s approximately 900 people of the Town’s registered 9,000 electors.
If that many people do oppose it, the Town would then be required to take the issue to a full referendum.