Martensville city councillors appeared to have reached a consensus at a meeting on Tuesday, May 7 about how to finance a $15 million loan for the new Martensville Recreation Centre (MRC).
The loan is needed to cover a shortfall in funding for the recreation complex currently under construction west of Highway 12. The building is slated to open this fall.
The original price tag for the MRC was pegged at $44.5 million, but that only included the design and construction of the facility and did not factor in other related project expenses.
Now, costs have risen to about $58.255 million as a result of inflation and the addition of equipment, fixtures and servicing not included in the original estimate used for the grant application.
Earlier this year, as part of its overall 2024 civic budget, Martensville City Council approved an $18.17 million loan amount for the MRC, aimed at making up the shortfall between the $39.8 million the city currently has on hand in available funding and the $58.255 million in total projected costs.
Councillors previously discussed this issue at a meeting on April 5. A report from the city administration to that meeting outlined several loan options, two of which included an increase in property taxes.
The idea of committing future city councils to built-in property tax hikes in coming years was rejected at that April 5 meeting, and councillors asked administration to come up with different options.
A recommendation from administration to the May 7 council meeting proposed a $15 million loan over a 20-year term at an interest rate of 4.95%. Annual payments on the loan would be $1,198,541.25. Total interest on the loan over the life of the term would amount to $8,970,825. This option would not be tied to any increase in property taxes, nor would it include any increase to the existing recreation levy.
Councillors at the May 7 meeting appeared to favour this financing arrangement. However, a formal vote by council will not happen until at least the next council meeting on Tuesday, May 21, when a bylaw to authorize the borrowing is expected to be on the agenda.
The loan is expected to be financed through the provincially-owned Municipal Financing Corporation.