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.
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.