Pyramid Recreation Centre Cost To Taxpayers

At the August 22, 2005 council meeting the St Marys Association for Responsible Town Government presented following estimates for the Pyramid Recreation Centre

$ 1.4 million each year
of added expenditure to the ratepayers, made up of:

$ 1,000,000 per year net capital cost
- the capital cost will be about $ 1.2 million annually assuming a 5.5% interest rate and no cost overruns
- the Town will collect $ 200,000 per year in donations ($4 million in total donations over the 20 year term of the loan)

$ 400,000 per year operating deficit, based on the Goderich and Aylmer experience

$ 1.4 million represents a 20% tax increase as current tax revenues are about $ 6.9 million.

St Marys Association for Responsible Town Government

At the August 22, 2005 council meeting the following reasons were given for forming the St Marys Association for Responsible Town Government and what its role will be:

Council’s indifference to the petitions led to a group meeting and a decision to create a ratepayers association. The goal is monitor Council’s performance, review and comment on Council initiatives before they go forward and suggest action plans to Council. The perception the ratepayers have is that their concerns were largely ignored in the Pyramid Centre decision so the association will allow a powerful unified voice. The next council term is four years and as our review of the Municipal Act shows, Council receives a blank cheque book as soon as they are elected. The ratepayers association is an essential check on Council decision making.

Pyramid Centre's Lack of Community Support

In the August 16, 2006 issue of the St Marys Journal Argus

St Marys Ontario Town Council (Mayor Tony Winter, Councillors David Cunningham, Robert Edney, Margaret Luna, Bill Osbourne, Bruce Symons and Gerry Teahen) wrote:

A survey that Council commissioned told us that 94% of residents were aware of the recreation centre proposal, with the majority in favour of the expansion.

Mel King corrected St Marys Council:

The survey is by Monteith Brown Planning Consultants.

On page 13 of their June 2005 report the consultants wrote:

"42% of those residents who were aware of the proposal spoke in favour of the expansion in some form or another while 37% were unsure. 22% of the residents who were familar with the proposal did not support the proposed expansion."

The 42% in favour in some form or another would include those who just want a second ice pad.

Andrew Atlin and John Munro added:

Council never had clear mandate from the people and the 1,175 petitions received to date confirm this statement.

The Pyramid Centre's Financing

In the August 16, 2006 issue of the St Marys Journal Argus

St Marys Town Council wrote:

We asked an independent accounting firm Deloitte & Touche to take a look at the Town’s finances and obligations. They created a viable financial strategy to pay for the upgrades, which ensures we have money to continue our regular work, move forward with other projects and meet future commitments. Deloitte & Touche also evaluated the cost of the building, the cost to run it, and how to pay for it. The responsible plan they put together was presented to the public on March 9, 2006.

Andrew Atlin / John Munro's ratepayer group wrote in reply:

Deloitte Touche never recommended that you go forward. Their report solely considered where Council what funds would be required to allow the project to go forward and where the Town might be able to access these funds. The Town had an operating loss of $ 341,000 from the 2005 FIR. All the surplus monies Deloitte Touche identified were used to fund current operations in 2005 and still were not enough to keep the Town from red ink.

Town debt payments from the project will require the taxpayers to pay at least $ 1 million per year for 20 years even with current fundraising considered. Aylmer and Goderich data show that the operating loss will be at least $ 400,000 per year more than our current level. Therefore, the total cost of the project to the municipality will be at least $ 1.4 million per year. The Town will raise $ 6.9 million in taxes in 2006 so the tax increase for every year from 2008 onwards will be at least 20% per year. Council has no evidence to the contrary.

The Pyramid Centre's Lack of Government Grants

In the August 16, 2006 issue of the St Marys Journal Argus

St Marys Town Council wrote:

Recreation buildings are owned by the Town of St. Marys. It is our responsibility, not the Province’s, to maintain them in a respectable state.

In recent years, the province has increased our grants to help with the costs of roads, bridges, water systems, land ambulance and public health services. Increased grants in those critical areas mean we have more capacity to bring our recreation facilities up to modern standards.

The Province has also responded to the Town’s need for a cost-effective way to fund this project. The OSIFA program provides financing that is low-cost with a fixed interest rate for long-term. While this is not a grant, it is provincial help that allows us to improve the quality of our public services. These services contribute to a high quality of life and a strong, prosperous economy.

Andrew Atlin / John Munro on behalf of a ratepayer group wrote in reply:

No municipal government would consider a project of this size without exploring whether grants were available. The other levels of government expect to participate in major infrastructure projects. The SuperBuild and COMRIF programs were specifically designed to help Towns like ours. You dismissed this possibility even when one of your colleagues suggested it.

Fundraising and the St Marys Pyramid Centre

In the August 16, 2006 issue of the St Marys Journal Argus

St Marys Town Council wrote:

Volunteers have developed a comprehensive community-driven fundraising campaign that includes local service clubs, organizations, user groups, corporations and individuals. The fundraising committee is working together for the community to create recreational opportunities and strengthen the overall appeal of St. Marys to new and existing residents. By raising money now to support the centre, we are reducing the amount of your tax dollars required.

Andrew Atlin and John Munro on behalf of a ratepayer group wrote in reply:

A fundraising team needs a chance. They need a target and a receptive community. Council’s approach makes their task much more difficult. Aylmer and Goderich have had no discernable improvement in their economic position following the building of their projects. Both the Galloway and Monteith reports did not link any growth improvement to the project.

Timing of the Pyramid Centre Project

In the August 16, 2006 issue of the St Marys Journal Argus

St Marys Town Council wrote:

The various components of the Pyramid Recreation Centre are proceeding all at once in order to achieve significant savings and economies of scale. For example, by twinning the existing arena there will be an estimated 50% savings per ice pad on payroll and utility costs, when compared to a single pad facility. Twin pad arena may also augment revenue streams with special evenets and tournaments. The construction odf a pool in the same location as the two rinks will offset the operating costs associated with the aquatic components. Landscaping and parking lot improvements will also be finalized in the project. It is important to note that the baseball diamonds and soccer fields will remain in their present location.

Andrew Atlin / John Munro on behalf of a ratepayers group replied:

Council may have received a wonderful price. The problem remains that a great price on a Porsche only works if you can make the payments. The Town can’t afford the payments.

The Pyramid Centre's Impact on Other Projects

In the August 16, 2006 issue of the St Marys Journal Argus

St Marys Town Council wrote:

The Pyramid Recreation Centre project will not impact on Council's ability to move forward with other projects to our community.

Currently, we are negotiating with Perth South to acquire land necessary to help attract industry. Purchased land will be funded from reserves and then sold at market rates in parcels that best meet the needs of the individual industry. Land is a solid investment ans a valuable asset within the Town's financial portfolio. Council does not plan to raise taxes to achieve a boundary change and acquire industrial land.

Later this year, we will conclude the upgrades to our wells that were required out of the 2003 Walkerton legislation. Our well supply will be fully compliant with modern standards. The total cost of the project is $3.3M. Two-thirds of this cost
was paid by the Provincial and Federal governments through the OSTAR program. The Town's share of the project is $1.1M and will be fully paid out of water rates.

Andrew Atlin / John Munro's ratepayer group wrote in reply:

Frankly, Council has no idea whether they can afford to do any other infrastructure projects. They don’t know whether the recreation project will cost more than they estimated and they don’t know what the final interest rate will be on the loan.

If the interest rate on the complex and operating centre loans goes to 6.5% the Town is out of borrowing capacity. The level of Town debt per household after the project is finished will be double that of any other community in southern
Ontario we have looked at.

Note: St Marys debt was compared to Chatham, London, Guelph, Aylmer, Stratford, St Thomas and Brantford. The figures can be seen at www.freewebs.com/stmaryspyramid/ad.htm

Inside Stratford / Perth Editorial

Richard Roth in this week's Inside Stratford / Perth writes in his editorial:

The only thing I want to note is that my central position is that a town council in a municipality the size of St Marys simply cannot ignore a petition bearing (now) well over 1,100 names. Don (Gibson) makes very good points about public meetings of the past, but none of this explains why, if the public was so well informed, so many people are now clamouring for more information.

My understanding is that the Deloitte study is open to question. Perhaps handing out something like this out at a public meeting is a little too much, too late. Can a layperson understand it? At least one of the protest group members is an accountant, I believe, and perhaps this is why the Deloitte report is not being treated by the group as if it arrived carved on two stone tablets. I don't know.

I certainly respect those who want a rec complex, but I still feel the protestors have raised some good points, and I believe a petition representing almost as many voters as cast their ballots for the mayor is something that needs to be addressed. This tally is equivalent to the government of Canada being presented with millions of names. If this doesn't represent a groundswell of concern, I don't know what does.

In Wild Wild St Marys

Andrea Macko in her editorial in the St Marys Journal Argus writes:

The Pyramid Centre. Will it or won't it be built? Construction has began, but if Andrew Atlin and company has their way, it just may not be. Like it or not, we seemed to be past it once and for all, and now we're back in a quagmire.

The showdown is comparable to one of those old Technicolor Westerns, except that Main Street has been replaced by the arena's parking lot and it's difficult to tell who's wearing the black Stetson and who's wearing the white one. You can almost hear the rattlesnakes and see the tumbleweed blowing by as each side sizes each other up and tries to guess at motives and who will draw first.

Town councillors are bound by an informal gag order, like kidnapped womenfolk in their calico dresses stashed away at the saloon, while the townspeople search high and low for answers from Town staff, who have provided measured responses through ads and, some would say, silence. Atlin is the rogue, with sparkling spurs and seemingly endless rounds of ammo just waiting to be fired.

But the ending may not be Hollywood-perfect. Feelings have been hurt, opinions ignored and lovers of 'The Town Worth Living In' scorned. Room for a sequel? We'll see come election time in November.