Policy Broken: McMeeken completely paid by bank loan

6
Money

SAULT STE. MARIE, ON – If Sault Ste. Marie City council approves option 1 of the replacement for the McMeeken arena they will be violating rules they laid out for themselves less than a month ago.

During the September 28 council meeting, they passed a new debt financing policy which states only 60 percent of any debt can be external (for example loans from a bank).

During the meeting, Chief Financial Officer Shelly Schell stated the reasons for sound financial policies.

“Formal written policies adopted by governments, institutionalize good financial management practices, clarify strategic financial management and define boundaries,” said Schell. They “support good bond ratings, promote long term strategic thinking, manage risk to financial conditions and comply with established public management best practices.”

The staff recommended option for rebuilding the McMeeken arena is a twin-pad facility which will cost taxpayers $36.7 million over the next 25 years.

Regardless of the option council picks as a replacement they are all stated to be financed 100 percent with external debt.

In an email exchange with a councillor, they told us an exemption to the Debt Financing Policy has been recommended by staff in a report on the agenda.

McMeeken Long term financing

The report referred to is recommended to be accepted as information not a recommendation by staff.

The report created by Schell notes most of the city’s long-term debt will be retired by 2022 putting them in a unique situation.

Schell makes note of some of the future projects which will need some sort of financing for the city.

A new Firehall, the downtown plaza, and sewage plant maintenance are all big-ticket items proposed for the future.

If the council approves the recommended option for the McMeeken replacement they will be doing it at the risk of losing long-term flexibility and sustainability.

Follow me @superiordangray on Twitter for updates throughout the evening of October 26, 2020 for the council proceedings.

6 COMMENTS

  1. Well having 2 double pad arenas would help in allowing us to have larger hockey tournaments in town, while still allowing other leagues to continue on other available rinks. Tournaments fill up hotel rooms, fill up restaurants and fill up shopping centers at the same time. Tournaments are an amazing source of revenue for the city, specially being so centralized in the province and close proximity to the boarder. Every other option literally brings zero revenue to a city working about their financial position.

    Reply moderated
  2. People can make due with outdoor rinks until we get back on our feet. (They were good for old timer hockey players, they should be good enough for today’s youth). The arenas we have already are money sinks.

  3. The city should be looking at the sewage plant maintenance and the McMeeken for sure. As far as a firehall, the city website states they operate out of 5 response centres already. Do we need six? The downtown plaza can also wait as there are definitely more important projects needed right now. With the pandemic, and all events consistently being cancelled we need to tighten the purse. Especially since the city likes to throw money away on things like the empty lot where a strip joint once stood. City council insisted on bike lanes all over the place, yet, did nothing to stop people from parking in them. Always the cart before the horse in this town. Transparency has been far from true with this group. When is the next election?

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