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Proposed Funding Plan For New Rec Facility

By Brad Perry Sep 29, 2022 | 2:15 PM

The exterior of Saint John City Hall is pictured in this file photo. Image: staff photo

Saint John has unveiled a proposed funding plan for a new multi-purpose recreational facility in the city.

The facility, which is one of council’s top priorities, would replace some or all of the city’s aging arenas.

Kevin Fudge, the city’s chief financial officer, presented the funding plan Wednesday to finance committee members.

Fudge said while no engineering design or preliminary estimates have been done, a building like this could cost $50 million to $60 million.

He noted the new UNIplex multi-purpose facility in Dieppe, which only has two sheets of ice, cost more than $31 million to construct.

Assuming the city can secure one-third of the funding from the province and one-third from the federal government, Fudge said they need a funding plan for $20 million.

“This project is not fiscally feasible without the provincial and federal government support,” Fudge told committee members.

Staff proposes creating a $15-million reserve fund for the project and capping any debt at $5 million.

To create the reserve fund, staff would consider allocating up to $3 million annually over five years from the general operating budget.

Coun. Paula Radwan said she is a believer in saving money for investments, but questioned where they would find $3 million a year in an already tight budget.

City Manager John Collin said the funding would be conditional on a number of things, including tax base growth and service level requirements.

Collin said the city requires three per cent growth annually “just to survive” and maintain “acceptable” service delivery, and four to five per cent to “thrive and excel in terms of service delivery.”

“For us to save, as we’re suggesting now, we’re really talking about growth rates of six per cent and more,” he said.

To reduce pressure on the operating budget, council will be asked to consider allocating any annual surpluses to the reserve fund.

Collin said this is a prudent step as the city usually has a “modest” surplus at the end of each year.

“There’s no guarantee that we will have a tax assessment growth rate to be able to do what we’d like to do in terms of putting significant amounts in the reserve right at the beginning of the budgetary process,” he said.

Coun. David Hickey asked if it is reasonable to expect the project would still be in the $50-million to $60-million range within five years, given the record inflation rates we are currently experiencing.

Fudge said there is a possibility it could be higher, noting staff will have more specific estimates as the project becomes a reality.

“If it is higher, then we’d have to adjust and come back with a modified strategy,” he said.

Finance committee members voted unanimously to adopt the recommendations.


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