Town to seek grant funding for Texas Road, Pump Station #2

 

Town Logo Small-webBy Ron Giofu

 

The Town of Amherstburg will apply for funding under the Ontario Community Infrastructure Fund (OCF) and the Small Community Fund (SCF) for a pair of long-awaited projects.

The town is seeking funding for the $2.8 million Pump Station #2 project, one that will connect Kingsbridge and Golfview subdivisions to the new wastewater treatment plant, a project the province has mandated be done. The town is also seeking up to $2 million for Texas Road, though there was debate at a Sept. 15 special meeting of council as to the scope of the project. The dollar figure quoted in the report was $3.7 million, but some on council questioned if it was still a $6 million project.

“The OCIF will provide a maximum of 90 per cent of total project costs or $2 million, whichever is the lower amount,” explained director of economic and community development Tony DeThomasis in a report to council. “The federal government’s SCF is a maximum federal and provincial contribution from all sources and typical be two-thirds of the total eligible costs of a project. There is no cap with respects to the SCF. Funding will be capped at two-thirds of the total eligible costs of the project. If successful, funding for the OCIF will be flowed as project milestones are achieved. The SCF funding is receipt based and funding will be flowed as directed by the program.”

DeThomasis noted that proposed projects must be completed by Dec. 31, 2016 in the OCIF, and within five years of the start date for the SCF.

“If the Town of Amherstburg is successful in securing funding for Texas Road through the OCIF, funding will be required for the balance of the project. OCIF will provide a maximum of 90 per cent of total costs or $2 million, whichever is the lower amount. Engineering has provided a proposed budget of $3.7 million for Texas Road.”

According to DeThomasis’ report, director of finance Justin Rousseau has recommended that the town apply for bridge financing to cover the costs of the potential projects until project funding is received.

“Bridge financing these projects will assist in preserving cash flow that would otherwise be used for capital works. Additionally, bridge financing these potential projects will allow administration the flexibility to rebuild reserve accounts while matching payments to the asset, within its useful life.”

DeThomasis noted that once projects are completed, town administration will be in a position to consider debt repayment options.

“Building reserves and cash flow will allow administration the ability to pay out or consider terms on the remaining balance of these potential projects. Debt repayment projections indicate that by the end of fiscal year 2015, the town will have paid back an extra $3.1 million in debt,” he stated. “If both projects are completed on budget and funding is provided as projected in this report, the total overall debt for the town would remain at current levels at the end of 2015.”

Mayor Wayne Hurst said with regards to the Pump Station #2 project, there is no doubt the town has to proceed. He compared having a new treatment plant with no hookups to the Kingsbridge and Golfview areas like “buying a new suit and keeping your old socks with it.

“It’s a project that has to be done, no doubt about it,” said Hurst.

Councillor Diane Pouget noted the Texas Road project was talked about as being a $6 million project and wondered if the next council could have their “hands tied” if the project were to proceed at another dollar figure. Councillor John Sutton said the motion on the books is still the $6 million option for Texas Road but wanted public consultation before it were to proceed in any fashion.

“Without public consultation, I don’t want any part of this,” he said.

Deputy Mayor Ron Sutherland said the town has to land the grant first, then decide at what level they would complete Texas Road.

“The biggest thing is getting the money, then we can proceed from there,” said Sutherland.

CAO Mike Phipps noted in a report on Monday night’s agenda that the tender council had agreed upon over one year ago was $6.5 million but, with an anticipated 20 per cent increase in total costs factored into a re-tender, administration would be looking at funding a $7.8 million project.

“The cost to finance the Texas Road project, assuming a grant of $2 million,  amortized over 20 years, will result in a tax increase beginning in 2015 or 2016 of approximately another 2.25 per cent,” said Phipps in his report. “The total debt at that time would be approximately $51.8 million. The town is facing at least a 5.25 per cent tax increase in 2015 to service current debt along with the new debt created by Texas Road.”

 

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