Current Temperature

1.9°C

October 29, 2020 October 29, 2020

Gymnastics borrowing bylaw passes first reading

Posted on April 30, 2014 by Taber Times

Bylaws authorizing the Town of Taber to borrow and lend funds totalling $425,000 to support the Taber Gymnastics Fitness Club’s (TGFC) building construction project have passed first reading.

On April 14, council voted 6-1 to approve first reading of Bylaw 5-2014 authorizing the Town of Taber to incur indebtedness by the issuance of debentures to the Alberta Capital Finance Authority for financing the Taber Gymnastics Fitness Club building project.

Coun. Randy Sparks was the sole vote in opposition to the initial motion, characterizing the process that had been undertaken by council and administration to purchase the TGFC’s downtown lots as an “error in the system.”

“The process should have been that there was an independent appraisal done, and the town would pay appraised value for that lot. An environmental (assessment) could be huge. I think the cart was way put before the horse in this situation here, because there could be some issues there. I hope that there isn’t, but this is public funds we are dealing with here — not private. These are public funds, and I don’t think that we did our due diligence before this lot was purchased. I think there’s an error in the system here, and I hope it all works out, but generally much more background work would have been done in a situation like this than was done on this piece of property.”

According to administration, once the TGFC’s building has been constructed it will be owned by the town and leased to the club, which in turn will be required to repay to the town the funds it borrowed and lent to the club to build the facility.

“Don’t think that the other user groups within this town are not looking at this very seriously,” said Coun. Sparks. “Because they’d love to get a break like this. It’s an interesting concept here. The town owns the lot, the town will own the building, that someone else is paying for so they can get rent for $1 per year. Pretty sweet deal.”

In response to a query from Coun. Joe Strojwas, director of corporate services Dale Culler confirmed the agreement with the TGFC being contemplated by council and administration was similar in most respects to a previous agreement between the town and the golf club.

The amount being borrowed by the Town of Taber will be $425,000, which will be repaid by the town over 25 years in semi-annual installments, at an interest rate not to exceed 10 per cent, or the interest rate fixed by the Alberta Capital Finance Authority.

“There’s no doubt that you have some risks here,” said CAO Greg Birch.

“You’re doing three things. You’re lending them money, if they don’t repay it you’ve got some risks. You’re securing that because you will own the land and the building, but maybe you don’t want a gymnastics-based building downtown. The second thing you’re doing is buying their land. The third thing you’re doing is taking ownership of a building they’re paying for, you’ve got a lease situation you’re setting up as well. All three have exposure.”

According to Bylaw 5-2014, the total cost of the project is estimated to be $658,600, of which the TGFC is expected to contribute $233,600.

In the follow-up motion, council voted 5-2 to approve first reading of Bylaw 6-2014 authorizing the Town of Taber to lend by the issuance of debentures from the Alberta Capital Finance Authority for financing the Taber Gymnastics Fitness Club building project.

Coun.(s) Randy Sparks and Rick Popadynetz opposed the motion.

“I know the gymnastics club will take over this building and do a wonderful job operating it, maintaining the building, making sure it’s not run down. They’ll do an awesome job,” said Coun. Sparks.

“And even though the comment was made that my concerns are water under the bridge, and yes they are — but I still personally wish that they would have maintained ownership of this lot and building, and shown to the people that they can do it on their own, as they originally wanted.”

Leave a Reply

Get More The Taber Times
Log In To Comment Latest Paper Subscribe