SOEC a gift we keep giving for

Dear editor: Jake Kimberley’s claim at the all candidates meeting they had to go to a cost-plus contract for the SOEC is garbage. Major contractors know the “bait and switch” trick very well: bid low, get the contract, push the price up.

The SOEC $9.7-million grant was an Olympic Legacy grant from during David Perry’s term.

Daryl Clarke jumping in to back Kimberley when unaware of the true facts illustrates why we should pay critical attention to what comes out of Daryl’s mouth.

Penticton taxpayers agreed to spend $56.2 million to build the SOEC. Those costs ballooned by $25 million to $81,231,638. To cover the shortfall reserve accounts were depleted by $15,831,638. Another $2 million was taken from the operating budget plus casino funds from four sources totaling $16.5 million. Aside from the B.C. grant of $9.7 million we took on additional debt of $39,200.000.

The DAC payout of $40 million was supposed fund debt payments and interest. However DAC funds of $9.1 million is shown as part of construction funding. If those DAC funds were part of the $40 million commitment then the DAC funds must already be depleted.

The city had to make a deal with the province to get more DAC funding for the SOEC. The decrease in unrestricted casino revenue associated with this deal (from 16.7 per cent to 10 per cent of net casino revenue) will cost Penticton between $13 and $23 million over the next few decades. The city received $1.25-million less unrestricted casino funding in 2007-08 than it would have under the old deal. This real cost has not been allocated to the SOEC project. (For purposes of this letter we allocate the figure halfway at $18-million.)

At the end of 2015 the original borrowing of $39,200,000 left a debt owing of $11,176,552. The total cost of retiring the $39,200,000 will be $52,117,165. Final payments of the six bylaw borrowings for the SOEC are: 2013, 2017, 2017, 2018, 2026 and 2028.

The actual cost of the SOEC: Before interest: $81,231,638. Plus interest: $12,917,165. Loss of DAC Funding: $18,000,000. Minus B.C. grant: $9,700,000. Total SOEC Cost: $102,448,803.

Elvena Slump Penticton