LaSalle Park Ma­rina’s ex­pan­sion risky busi­ness

With de­clin­ing rev­enues and per­haps less de­mand, this plan will need some work

The Hamilton Spectator - - COMMENT - Free­lance colum­nist Joan Lit­tle is a for­mer Burling­ton alder­per­son and Halton coun­cil­lor. Reach her at specjoan@co­geco.ca. JOAN LIT­TLE

The most con­tro­ver­sial re­port on the last round of Burling­ton’s com­mit­tee meet­ings wasn’t even dis­cussed. Be­fore the meet­ing, it was de­ferred, likely un­til Septem­ber.

LaSalle Park Ma­rina As­so­ci­a­tion (LPMA), a non­profit or­ga­ni­za­tion cre­ated in 1981, op­er­ates a ma­rina of 219 slips, and is pro­tected by a float­ing wave break.

Strong storms in re­cent years have been caus­ing dam­age to boats, lead­ing to a de­ci­sion to con­struct a per­ma­nent wave break. To fund it, LPMA says it needs to ex­pand from 219 to 340 slips.

In May it asked coun­cil to send a let­ter of sup­port for their $14 mil­lion project (in­clud­ing 30 per cent con­tin­gency) to the fed­eral and provin­cial gov­ern­ments, hop­ing for $4 mil­lion each in grants from Ot­tawa and the prov­ince, and a $4M In­fra­struc­ture loan from On­tario.

At that meet­ing, LPMA asked for and re­ceived a city Joint Ven­ture Loan to re­place 60 finger docks. It had al­ready se­cured a $109,000 fed­eral in­fra­struc­ture grant to­ward the cost, and needed $250,000, which they will re­pay at 2.25 per cent over 10 years — $29,197 an­nu­ally.

The ex­pan­sion is con­tentious. There were ob­jec­tions from Burling­ton Green and the Trum­peter Swan Coali­tion over the wel­fare of win­ter­ing en­dan­gered swans, wa­ter qual­ity im­pair­ment, and con­struc­tion length — about three years, off-sea­son for boat­ing. That means swans could be af­fected. Boaters wor­ried about storm dam­age and in­sur­ance avail­abil­ity and cost. A boater told me the Burling­ton side of the bay suf­fers worse from storms than Hamil­ton mari­nas. Is that ac­cu­rate?

Sub­se­quently a boater wrote that he has been un­able to sell his slip, bought years ago, ask­ing where’s the mar­ket for the new ones? Re­lay­ing that in­for­ma­tion elicited the most in­sult­ing email I have re­ceived in my years as a Spec colum­nist, from Coun­cil­lor Rick Craven. I of­fered to re­pro­duce his crit­i­cisms ver­ba­tim, but he de­clined.

All coun­cil­lors ex­cept Mar­i­anne Meed Ward had voted to send a sup­port­ive let­ter. She wanted as­sur­ance from the fi­nance depart­ment first that tax­pay­ers would be pro­tected if LPMA were to de­fault. John Tay­lor sup­ported the let­ter, say­ing he would not sup­port ex­pan­sion if it put tax­pay­ers at risk. Well, it does. LPMA pro­vided a busi­ness plan, but when it re­quested the let­ter, Fi­nance had not had enough time to as­sess it. If there’s a depart­ment in City Hall that ex­cels on all lev­els — bud­get prepa­ra­tion and track­ing, ac­count­ing, and in­vest­ing — it’s Fi­nance. Its re­port for the July 11 meet­ing was with­drawn. LaSalle ques­tioned it. It will be back later, along with a dis­cus­sion on over­all fund­ing poli­cies.

Based on that re­port, no re­spon­si­ble coun­cil­lor could sup­port the ex­pan­sion. Fi­nance re­viewed LPMA’s 2011 to 2015 state­ments, which show steadily de­clin­ing rev­enues, with gen­eral/ad­min­is­tra­tion cost at about 30 per cent of rev­enues.

The busi­ness plan projects much higher rev­enues, but omits sev­eral key ex­penses, in­clud­ing life cy­cle costs. It’s un­known yet whether ic­ing will be a prob­lem in the con­fined area.

Too many un­knowns, with no con­tin­gency in the op­er­at­ing bud­get for any, and debt re­pay­ment would cost about 50 per cent of rev­enues for 25 years.

LPMA ap­par­ently does not qual­ify for an In­fra­struc­ture On­tario loan. It is count­ing on $9.4 mil­lion in grants, and would need a city Joint Ven­ture ( JV) loan of $4.6 mil­lion. But JV loans re­quire 10 per cent down of the to­tal project cost — $14 mil­lion, mean­ing $1.4 mil­lion down — also ex­cluded, and must be re­paid in 10 years. They need 25 years. Fi­nance warned that this amount could af­fect the city’s bor­row­ing ca­pac­ity.

Another is­sue is cash flow. Gen­er­ally se­nior gov­ern­ment grants are paid upon proof of “sig­nif­i­cant project com­ple­tion”. That means the city would have to ad­vance cash flow. Fi­nance es­ti­mates the cost of lost in­ter­est on the $9.4 mil­lion for the city to do this at about $140,000 — es­sen­tially a “tax­payer con­tri­bu­tion”.

Ex­cluded, too, is the cost of de­tailed de­sign, (about $350,000). LPMA has $356,372 in a fund for a new wave break re­place­ment. De­sign costs would de­plete it.

This will be an in­ter­est­ing dis­cus­sion when the re­port comes back.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.