Financing options for the arena project
By Chad Ingram
Published March 7, 2019
Minden Hills councillors heard about a couple of options for financing the township’s arena renewal project during a Feb. 28 meeting.
In a 4-3 vote last month, council approved proceeding with the project, which will include the construction of a new arena and gymnasium and carry a price tag of approximately $12.5 million. The plan is for the township to seek funding or financing for $11.5 million of that, and undertake a fundraising campaign to assist with the remainder. Mayor Brent Devolin has said he believes that a million dollars could potentially be raised.
During the Feb. 28 meeting, councillors heard a presentation from Gavin Maitland of Infrastructure Ontario, which is an agency of the provincial government, regarding its loan program. Infrastructure Ontario, as Maitland explained, provides low-risk, low-cost loans for public infrastructure renewal projects that can run the gamut from replacement of vehicles to multi-million-dollar facilities. It provides loans not just to municipalities and municipal corporations but also universities, housing providers, and a host of non-profit agencies.
“The terms that we offer are very flexible,” Maitland told councillors, explaining that terms of loans are often designed to match the useful life of the asset. Loans are available with up to 30-year terms, with a fixed rate for the entirety of the term. Most rates are between approximately 3.2 and 3.6 per cent, depending on the type of loan and length of term. Infrastructure Ontario does not take security on any assets.
“We’re not here to make a profit, we’re not here to compete with anybody, but we are here as an option,” Maitland said.
Devolin said there would be strong consideration of financing through IO.
“We are likely to put your program to use,” he told Maitland.
Councillors also heard a report from community services director Mark Coleman regarding the Green Municipal Fund, funded by the Federation of Canadian Municipalities.
That program supports municipal capital projects involving energy, transportation or waste and provides grants alongside loans.
When it comes to the arena project, examples of aspects that would be eligible for the program include items such as HVAC systems; building components such as insulation, walls, and windows; advanced automation and control systems; any on-site renewable energy generation and storage systems and so on.
Under the program, municipalities receive a grant worth 15 per cent of the loan alongside the loan itself, up to a maximum of $5 million. The grant on a $5-million loan would be $750,000. Loans are for a maximum term of 20 years, with a fixed interest rate locked in for the entirety of the term. The current interest rate is 2.65 per cent.
The township will submit an initial review form to the program to see about eligibility.