April 25, 2015 - 8:32 AM
KAMLOOPS – The mayor wants Kamloops residents to know the preliminary business case for the proposed performing arts centre is, just that, preliminary.
The numbers have not been finalized, nor will they be until the centre moves into the next phase of construction. What the numbers represent now, is feasibility, Peter Milobar says. And in terms of feasibility, as was apparent from the public information session, residents are keen to know what the performing arts centre will cost them.
The city will create a pre-construction reserve with money added during construction before the centre is actually finished, he says. During the first two years of the fund, taxes will increase one percent in the first year and then another one per cent the following year. The two per cent tax increase will continue for at least 20 years until the project is paid off.
It works out to about $40 per year for the average household, Milobar says.
The city’s debt funding strategy shows the expected $90-million project is expected to incur $48,765,900 worth of debt. The city is prepared to take two decades to pay down this sum plus its accruing interest.
Each year taxpayers will be on the hook for $3.68-million in debt repayments, approximately $1.2-million of this being interest alone. Added to the $900,000 in expected operating costs, the yearly payment comes to nearly $4.6-million.
While these seem like giant numbers, Milobar put the costs into perspective.
“We’re telling you it’s going to be a twenty year borrowing at four per cent to build a $90-million building. We’re not trying to pretend there’s not an interest charge,” he says.
Milobar maintains the project has always been transparent, there was never an attempt to gloss-over debt repayment. Milobar acknowledges accrued interest in the millions of dollars, but says the most important fact is the $90-million price tag.
“It’s like when you buy your house for $300,000 you really paid $500,000 for it. But whoever says that? We never talk in those numbers when we talk about a project; it’s like a mortgage.”
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News from © InfoTel News Ltd, 2015