When it comes to funding its proposed new arena, the Municipality of Chatham-Kent has specified where some of the money will be coming from.
In May, council approved moving forward with the plans to build a new arena and multiuse facility in Chatham, as well as contributing a maximum of $18.5 million of municipal funds towards the project. However, the construction of the project will only move forward if the municipality can secure funding from upper levels of government.
During Monday night's council meeting, council approved the transfer of $18.5 million from several existing municipal reserves into the Multi-purpose Sports Complex Reserve to go towards the arena project.
Funds will be transferred from the following reserves into the Multi-purpose Sports Complex Reserve.
• $8 million from the Community Investment Reserve Fund (Accumulated surplusses from slot revenues, landfill host fees and Entegrus dividends)
• $4 million from the Strategic Development Reserve (Funds received prior to the construction of the North Kent Wind Farm project)
• $1.7 million from the Facility Replacement Reserve (2017-2019 council approved funding for new facilities)
• $1.6 million from the Closed Wage Related Issues Reserve (One-time wage-related provisions no longer required)
• $1.5 million from the Energy Price Fluctuation (Recent budget surplusses in electricity)
• $1 million from the Employment and Social Services Corporate Initiatives Reserve (Funds accumulated to support major corporate initiatives benefiting the community)
•$0.6 million from the Lifecycle Arena Replacement Reserve (Funds that were identified to set aside for a future arena rebuild)
• $0.1 million from the Grass Tender Reserve (A reserve that is no longer required)
The municipality applied for $36.65 million in funding from upper levels of government through the Community, Culture, and Recreation Funding stream to go towards a 2,200 seat, $60 million arena. In order to secure the money, the application must first be approved by the province, which will then pass it along to the federal government for final approval.
Setting aside money for the project on Monday raised some questions from councillors, including from Councillor Doug Sulman, who asked why the reserve was being established before the government funding was secured. According to Gord Quinton, CK's chief financial officer, the Multi-purpose Sports Complex Reserve was being established as a form of "housekeeping."
"[Council] asked for $18.5 million to be set aside in case we get the grants. This is our recommendation of where that $18.5 million comes from... If we didn't do this, [council will] be faced at budget time not knowing whether [council] could spend $8 million out of that first reserve on another purpose or not," Quinton explained. "[Council] committed $18.5 million from reserves but [they] didn't commit what reserves they were from. This is just specifying where we recommend they come from."
The decision to establish the arena reserve was passed, but it was far from unanimous. A total of 11 councillors voted in favour of it, while six voted against it including Councillor Michael Bondy, Amy Finn, Steve Pinsonneault, Doug Sulman, Trevor Thompson and John Wright.
Councillor Pinnsenault echoed many of Sulman's concerns.
"I just know that if we don't get the funding from the upper levels of government, there's no way we can afford an arena," said Pinsonneault. "I just don't think it's necessary right now to put 18 and a half million into a reserve that we may never need."
According to Quinton, the municipality should know by early 2020 if the funding was approved by the provincial government and then by mid-2020 if it was approved by the federal government.
Pinsonneault said he believed that it would be better to wait until then to set aside the money.
"It's only four months from now we're going to know whether we get our senior levels of government money. I think at that point in time we decide whether we want to make a reserve or not," said Pinsonneault. "I think we're putting the cart before the horse."
Although the $18.5 million is secured into the Multi-purpose Sports Complex Reserve, the money can ultimately be moved elsewhere at any point should council vote in favour of doing so. The $18.5 million does not include architectural design, land acquisition, outdoor sports fields, servicing or traffic mitigation costs for the arena project.