Residents in Sidney will not have a say on plans by the municipality to borrow up to $2 million over 20 years toward its share of a new roundabout tasked with improving traffic flow near the area of the warehouse Amazon plans to operate.
Sidney and North Saanich, as well as the Victoria Airport Authority (VAA), last month announced a memorandum of understanding to build a roundabout at the intersection of Beacon Avenue West and Galaran Road. The estimated cost of the project is $4.9 million, with Sidney and VAA each paying 40 per cent and North Saanich 20 per cent.
Sidney Mayor Cliff McNeil-Smith joined Couns. Barbara Fallot, Sara Duncan, Terri O’Keeffe and Chad Rintoul in favour of borrowing Sidney’s share of the money using the assent-free borrowing option. Couns. Scott Garnett and Peter Wainwright voted in opposition with both expressing support for the alternative approval process.
That process allows electors to signal whether they oppose local government proposals moving forward and requires 10 per cent or more of eligible electors to sign and submit forms in opposition to the proposed measure to require local government to obtain assent. Another option would be to hold a referendum.
“There was a loss of trust with the previous council, with respect to borrowing,” said Wainwright, referencing the up to $10 million the previous council borrowed without seeking assent toward Sidney’s new community safety building. “If we really do believe that this is a good project for the town, that everybody will support it, why would we be afraid of doing the alternate approval process? I think it is a step toward restoring that lost trust.”
McNeil-Smith acknowledged those arguments but also tried to draw out differences between the previous borrowing and this borrowing proposal. “I was certainly well aware of and had concerns personally with the large $10-million borrowing that did not go before the public for consideration during the last term,” he said. Residents shared those concerns at the time, he said. But in this case, nobody has come forward with concerns about borrowing the money.
“I have heard and others have heard that the community is very supportive of this project and that they would want to see this project go forward,” he said.
While acknowledging uncertainties, McNeil-Smith said Sidney has significant borrowing capacity. “We are financially healthy, so I’m comfortable moving forward with the process. If it was a different type of project, were there concerns about the project in the community, or it was a higher level of borrowing, I might think otherwise.”
Duncan, meanwhile, said the municipality has already done a lot of consultation. “I’m concerned about making it a larger deal than it is in a way that might really muddy the issue at this point when people are quite fatigued.”
She, like other speakers, also acknowledged concerns about unforeseen costs caused by rising interests rates and other issues.
While a staff report expects higher interests rates, it recommends Sidney wait until closer to completion to lock in borrowing. This means Sidney may not know the final interest rate for the borrowing for more than a year, possibly two years. This lack of certainty concerned Garnett, who also raised potential labour shortages, supply chain issues and effects of the ongoing conflict between Russia and Ukraine.
“I understand concerns about changes in interest rates over time as well,” said Duncan. “However, anything that is really going to affect interest rates and supply chain issues for this, are going to be the very same things that moot the need for this project in the first place.”
Staff also called for flexibility. “The quicker we lock-in, the more we eliminate our flexibility to choose alternate funding or to reduce the amount we ultimately borrow,” said Andrew Hicik, Sidney’s director of corporate services and chief financial officer.
On April 11, council passed first reading of the borrowing bylaw, now subject to provincial review, prior to final adoption. Staff are also preparing a temporary borrowing bylaw.
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