Municipality changes Meredith’s cost to taxpayers, again

avatar

by Nikki Mantell on May 25, 2009

The Editor,

Chelsea municipal office’s lack of consistency regarding the amount the Meredith Centre will cost taxpayers raises some serious questions.

On its website in “Frequently Asked Questions Concerning the Meredith Centre”, the municipality states that the cost to taxpaying households would be $1,875, or $75 per household/year over 25 years. This is based on 2,500 taxpaying households in Chelsea. (http://www.chelsea.ca/_files/centre_meredith_questions_2009_ang.pdf).

The mayor and Chelsea Foundation are frequently on record as saying it would cost $60/household/year (see the Business Plan).  And now, after a little more juggling, the municipality states on its website under “Meredith Centre – Impact on Municipal Debt” that it will cost $52/year for a house worth $292,600.

The downward trend in the municipality’s projected cost as the referendum approaches is obvious.  However, what is really clear from the latest calculation on the website, is that the municipality is finally showing us that for every dollar that is borrowed at five per cent interest and amortized over 25 years, taxpayers will pay an extra $0.77 interest for borrowing that dollar. They show how borrowing the $2.7 million will really cost all taxpayers $4.7 million (see  http://www.chelsea.ca/_files/meredith_explication_dette_anglais_2009.pdf).

Every dollar not yet budgeted for in the Meredith Centre will therefore cost all taxpayers $1.77. Sewage treatment, road modification (especially for water and sewage hook-up if a municipal system materializes), water, fundraising shortfalls, cost overruns, depreciation costs and net revenue shortfalls have not yet been accounted for and will potentially cost several million dollars plus interest charges.

The Municipality has a history of grossly underestimating costs: the price tag for the Farm Point sewage treatment system, for example, has jumped from $2.2 million to $5.4 million.

Now let’s look more closely at the proposal for the Meredith Centre. The 4,320 square metre Centre complex contains: an arena, cooling system, zamboni and walking track; a double gym with bleachers, fitness centre and showers; a community centre and conference centre with a lounge, patio, fully equipped kitchen, etc.  Do you really think it can be built for $9.8 million when the library -a 280 square metre, one storey shell and renovated basement built on a mostly pre-existing foundation, cost $0.9 million in 2009 dollars?

Even proportionally, based on the library’s cost per square meter, the Meredith Centre would ring in at $13.9 million. That would require borrowing $6.8 million, which with debt servicing, results in a cost of  $12 million to all taxpayers.  Divide that by 2,500 households and the cost per household comes to $4,800 per household. This may seem like a lot because it is a lot.  By voting no on June 14th, Chelsea taxpayers can say they’re uncomfortable with assuming so much municipal debt and personal cost for the centre as proposed.

Bob Milko, Chelsea