Moncton votes to borrow up to $95.4 million for events centre
WATCH: Moncton city council voted Monday to allow the city to borrow up to $95-million to fund the downtown events centre. Global’s Alex Abdelwahab reports.
MONCTON – Moncton council voted Monday to ask the Municipal Capital Borrowing Board for $95.4 million to continue with process of building the downtown events centre.
Council passed the motion after more than two hours of debate with councillors Brian Hicks and Paul Pellerin voting against it.
During a special public meeting, the city’s Chief Financial Officer John Martin told council the application was necessary to prove the City of Moncton has the capacity to meet all of its financial and legal obligations.
The $95.4 million is the total cost to build the centre, excluding the $12 million dollars the city has already paid to purchase the land.
But he said the plan isn’t for the city to borrow the full amount from the board, which is administered by the province, but instead about $39 million dollars.
“We have some funding sources that we’re still settling and unfortunately they cannot approve the funding for those items until it is settled,” Martin told Global News. “So what we’ve decided to do in consultation with them is move forward with the full application, as the funding sources come in and we only need a lesser amount, then we’ll just return the unused authority to the province.”
Martin said the City is facing tight deadlines. Council is expected to make the final decision on the future of the project, award the contract and report back to the public by Aug. 4. Then, the city must show it has all funding sources secured to meet its financial and legal close on Sept. 30.
The application to the Municipal Capital Borrowing Board will be made on July 20th.
Under the city’s current funding plan, it expects to get $48 million from government, $5 million from capital campaign fundraising, and $3.5 million from the sale of ancillary land adjacent to the centre site.
Last month, the province announced it would provide a $21 million dollar forgivable loan for the project. It had already committed to $3 million through replacement funding to other projects.
On Monday, MP Robert Goguen reconfirmed the federal government’s contribution.
“This week we will be at $18 million of the 24 asked, which is about 76 per cent” he said, adding the federal government is working with city officials on some projects that are still being considered through Building Canada funding and ACOA.
The federal government cannot fund projects that include professional hockey arenas, like the proposed centre, which would be home to the Quebec Major Junior Hockey League’s Moncton Wildcats. Instead, the city is using a system of replacement funding, where it is getting the federal government to fund things like new city buses, and upgrades to culverts.
Councillor Brian Hicks said he couldn’t support the motion because he was not confident that the city will not be forced to borrow more money in the future.
“It’s about what the final cost is going to be for the City of Moncton, what taxpayers are going to eventually pay,” he told Global News.
Hicks had proposed an amendment that would not allow the City to borrow more than $39 million.
But it was defeated, after Martin told council he believed it could lead the Board to not approve the loan request.